Superstar Returns

Francisco Amaral (), Martin Dohmen (), Sebastian Kohl and Moritz Schularick
Additional contact information
Francisco Amaral: Macro Finance Lab, University of Bonn
Martin Dohmen: Macro Finance Lab,University of Bonn

No 131, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: We study long-term returns on residential real estate in 27 “superstar” cities in 15 countries over 150 years. We find that total returns in superstar cities are close to 100 basis points lower per year than in the rest of the country. House prices tend to grow faster in the superstars, but rent returns are substantially greater outside the big agglomerations, resulting in higher long-run total returns. The excess returns outside the superstars can be rationalized as a compensation for risk, especially for higher co-variance with income growth and lower liquidity. Superstar real estate is comparatively safe.

Keywords: housing returns; housing risk; superstar cities; regional housing markets (search for similar items in EconPapers)
JEL-codes: G10 G12 N90 R21 R31 (search for similar items in EconPapers)
Pages: 87 pages
Date: 2021-12
New Economics Papers: this item is included in nep-his, nep-rmg and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_131_2021.pdf First version, 2021 (application/pdf)

Related works:
Working Paper: Superstar Returns (2021)
Working Paper: Superstar Returns (2021)
Working Paper: Superstar Returns (2021)
Working Paper: Superstar Returns (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:131

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