This paper aims to investigate the factors that contribute to the changes of house prices including ethnic factors. Australia is a multicultural country with diversified ethnicities. The median price of established houses (unstratified) in Sydney has reached a new record high of $910,000 in December 2015, increasing around 58.2 per cent from March 2011 [Australian Bureau of Statistics (ABS), 2015a]. However, the prices of some suburbs have increased more than prices of others.
Six suburbs that represent ethnic majority originally including White, India and China will be selected as pilot studies. Hedonic regression analysis will be applied for the analysis based on 2001, 2006 and 2011 census data.
It is found that the main drivers of house prices are the dwelling physical characteristics and accessibility to convenient transportation. The level of household income also plays an important role. However, the impact of changes of ethnic on changes of prices is not significant.
The study adds to the growing literature on the ethnicity changes on dwelling prices and is important for understanding whether some of the clusters of ethnic concentration or segregation effects property markets. This study is significant in its understanding of the main characteristics of ethnic changes of suburbs in Sydney.
An implication is that policy makers can attract different ethnic groups and encourage multicultural communities when they formulate housing and planning policies.
The relationship between ethnicity and house price appreciation is not extensively studied in Australia. This research contributes to the literature on the effects of ethnic changes on house prices and implications of policy formulation to encourage multicultural communities.
