Spatial-temporal dynamics of housing bubbles in Greater Sydney: A macro-micro submarket approach

Housing prices in Greater Sydney have risen sharply over the past two decades, raising concerns about speculative overvaluation and spatially uneven housing bubble formation. While prior research has examined housing bubbles at aggregated city scales, limited attention has been given to their spatial-temporal dynamics across nested submarkets. This study develops a macro–micro framework to analyse housing bubble formation across SA4 (regional) and SA2 (local) geographies in Greater Sydney from 2003 to 2023. Using price-to-rent ratios, spatial GIS mapping, regression analysis, and ARIMA/ARIMAX time-series forecasting, the study identifies both persistent and cyclical patterns of speculative activity. The main results reveal enduring bubble intensity in economically agglomerated and service-sector–dominated regions, particularly the Eastern Suburbs, Inner West, Ryde, and North Sydney–Hornsby. In contrast, peripheral areas exhibit more moderate, cyclical dynamics. Regression results show that transport accessibility, homeownership structure, labour market conditions, and income segmentation significantly influence bubble intensity, consistent with the New Economic Geography assertion. Time-series projections further indicate that speculative persistence is strongly conditioned by monetary policy trajectories, with low-interest-rate environments increasing the risk of renewed overheating. By integrating spatial econometrics with long-horizon forecasting, this study advances a multi-scalar understanding of urban housing bubbles. It provides an evidence base for geographically targeted macroprudential and planning interventions.