Spatio-temporal analysis of house price convergence based on a demographical distance

Convergences of house prices have been studied for over three decades, but yet have been confirmed because of spatial heterogeneity and autocorrelations in house prices. A spatio-temporal approach was recently proposed to address the spatial and temporal issues related to house prices. However, most previous studies placed the focus on the spatial heterogeneity and autocorrelations from geographical locations, which neglected other spatial factors. In order to overcome this shortfall, this research argued a demographical distance, constructed by demographical structure and housing market scales, to investigate the house price convergences in Australian capital cities. The results confirmed the house price levels in Canberra, Brisbane and Perth converged to the house price level in Sydney.