Home away from home? Foreign demand and London house prices

Badarinza, Cristian; Ramadorai, Tarun

doi:10.1016/j.jfineco.2018.07.010

Cited by 149 publications

(81 citation statements)

References 53 publications

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“…At the same time, an increase in global demand for safe assets may compress sovereign spreads where risk is perceived to be low, thereby pushing down mortgage rates and supporting house price booms in those countries (Bernanke et al 2011). For instance, foreign capital may be a driver of residential property markets in global cities such as London, New York, or Tokyo, especially during "flight to safety" episodes (Badarinza and Ramadorai 2018). In addition, as illustrated in Figure 2, asset managers may rebalance their portfolios to mitigate their losses, thus resulting in dwindling equity price returns (i.e., portfolio channel); this impact could be further amplified due to asset classes such as REITS.…”

Section: Introductionmentioning

confidence: 99%

House Price Synchronicity, Banking Integration, and Global Financial Conditions

Alter

Dokko²,

Seneviratne³

2018

IMF Working Papers

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Section: Introductionmentioning

confidence: 99%

House Price Synchronicity, Banking Integration, and Global Financial Conditions

Alter

Dokko²,

Seneviratne³

2018

IMF Working Papers

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“…Our model also connects to a growing literature that studies the effect of OOT home buyers on local housing markets. Badarinza and Ramadorai (2016) attribute foreign inflows in the London real estate market to political risk in the countries from which the capital flows originate. Using political shocks in a source country as an exogenous instrument, they estimate the effects of OOT buyers on house prices in London neighborhoods with a large pre-existing share of residents born in that source country.…”

Section: Introductionmentioning

confidence: 99%

Out-of-Town Home Buyers and City Welfare

Favilukis

Nieuwerburgh

2017

SSRN Journal

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The major cities of the world have attracted a flurry of interest from out-of-town (OOT) home buyers. Such capital inflows in local real estate have implications for affordability through their effects on prices and rents, but also for construction, local labor markets, the spatial distribution of residents, and ultimately economic welfare. We develop a spatial equilibrium model of a city that features heterogeneous households that make optimal decisions on consumption, savings, labor supply, tenure status, and location. The model generates realistic wealth accumulation and home ownership patterns over the life-cycle and in the cross-section. An inflow of OOT real estate buyers pushes up prices, rents, and wages. It increases the concentration of young, high-productivity, and wealthy households in the city center (gentrification). When OOT investors buy 10% of the housing stock, city welfare goes down by 0.3% of permanent consumption levels. The average renter suffers a large welfare loss while the average owner gains modestly. We adapt the model to the New York metro area, obtain detailed data on OOT purchases, and find that the observed increase in OOT purchases is associated with a 0.1% welfare loss.

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“…Information and methods regarding real estate price as well as the appraiser's expertise and experience play important roles in determining the economic value of real estate, especially in monetary terms (Badarinza & Ramadorai, 2018;Agyemang, Asamoah, & Obodai, 2018;Wen et al, 2018). To make reasonable and accurate judgements the appraiser must have sufficient information as well as professional knowledge and previous experience (Alexander & Barrow, 1994;Hill & Scholz, 2018).…”

Section: Real Estate Appraisal and Financial Engineering Theoriesmentioning

confidence: 99%

Establishing Dynamic Impact Function for House Pricing Based on Surrending Multi-Attributes: Evidence From Taipei City, Taiwan

Chen

Azzizi

et al. 2020

International Journal of Strategic Property Management

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The objective of the research is aimed for a solution that is to establish the dynamic impact function of surrounding multi-attribute for house pricing. It is also able to measure the ripple effect and allows the hedonic parameter estimates to vary from point-to-point. A comprehensive literature review is carried out to obtain an adequate theoretical basis for the corresponding hypothesis and concepts. The proposed dynamic impact function for multi- attributes is then constructed based on the characteristics of surrounding facilities. Adopting the convenience sampling criteria of 95% confidence level on the data sampling and 10% limit of error in a 5−95% proportion, we collect the empirical data of 39 yearly house sales in the investigated urban areas of Taipei city focusing on housing prices and then utilize them for evaluating and adjusting the function. The actual house price and that of proposed function affected by Mass Rapid Transit (MRT) stations are analysed, resulting in the correlation coefficient at 0.946 (single attribute) and 0.944 (multi-attribute), respectively. The findings support that proposed function can highly represent the house pricing pattern and be an accurate tool for appraisers.

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Home away from home? Foreign demand and London house prices

Cited by 149 publications

References 53 publications

House Price Synchronicity, Banking Integration, and Global Financial Conditions

House Price Synchronicity, Banking Integration, and Global Financial Conditions

Out-of-Town Home Buyers and City Welfare

Establishing Dynamic Impact Function for House Pricing Based on Surrending Multi-Attributes: Evidence From Taipei City, Taiwan

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