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Published in:
Geography of Migration: An Introduction Read chapter Read first chapter

2021 | OriginalPaper | Chapter

12. Effects of Immigration on Local Housing Markets

Authors : William Cochrane, Jacques Poot

Published in: The Economic Geography of Cross-Border Migration

Publisher: Springer International Publishing

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Abstract

This chapter surveys the international evidence regarding the impact of immigration on local housing markets. The theoretical framework provided highlights with the complexity of housing markets and the importance of distinguishing between the ownership and use of the stock of dwellings vis-à-vis the residential real estate market. Evidence from eight countries, and from meta-analysis shows that immigration leads to higher house prices and rents, and lower housing affordability. On average, a 1% increase in immigration in a city increases rents by 0.5–1%, the effect on prices being about double that. There is a large variance around this, related inter alia to the period, spatial scale and local economic conditions. Additionally, the housing impact of immigration depends on the demographic and economic composition of the immigrant flow, on macroeconomic conditions and expectations, on the institutional factors influencing the price elasticity of the supply of new dwellings and on how the native born react to immigration. The tendency of the native born to move from areas where migrants settle can lead to relative house price declines in these areas. Overall, immigration has been a minor contributor to sharply rising house prices in contemporary fast growing agglomerations.

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previous chapter Migration and Human Capital: The Role of Education in Interregional Migration: The Australian Case
next chapter The Urban Geography of Segregation
Footnotes
1
The assumptions under which P = R/i holds include: no depreciation, a perfectly competitive housing market and an absence of government intervention in the market. Clearly, in more realistic markets the relationship is mathematically more complicated but P and R remain nonetheless often strongly correlated.
 
2
The case of a migrant household sharing a dwelling with a resident household (often earlier migrants), can potentially lead to a high person to floor area occupancy rate, also referred to as residential crowding (Burr et al. 2010).
 
3
For census purposes Statistics Canada divides the country into 289 census divisions. These are intermediate in the spatial hierarchy between municipality (smaller) and province/territory (larger) (Akbari and Aydede 2012, p. 1649).
 
4
Two instruments are used; one based on the settlement patterns of past migrants (ethnic networks) and another based on geographic accessibility (“gateways”) (Gonzalez & Ortega 2013, pp. 42–43).
 
5
The desire for homophily does not necessarily suggest that the native born are opposed to diversity. For example, the effect of greater ethnic diversity on the variety of ethnic cuisine offered in cities has been shown to be a positive amenity effect of greater immigration that may increase property prices (Bakens et al. 2018).
 
7
See for example the recent study by Li and Tang (2018) on the case of immigration impacts in Singapore, in which public housing is only available to the native population.
 
8
We acknowledge, and incorporated, some suggestions for future research provided by two anonymous referees.
 
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Metadata
Title
Effects of Immigration on Local Housing Markets
Authors
William Cochrane
Jacques Poot
Copyright Year
2021
Book
The Economic Geography of Cross-Border Migration

Print ISBN: 978-3-030-48290-9

Electronic ISBN: 978-3-030-48291-6

Copyright Year: 2021

DOI
https://doi.org/10.1007/978-3-030-48291-6_12