The 2015 European Refugee Crisis and Residential Housing Rents in Germany

Kathleen Kürschner and Michael Kvasnicka

ERES from European Real Estate Society (ERES)

Abstract: This paper studies the impact at county level of the mass arrival of refugees in 2015 on residential housing rents in Germany. Using unique and novel data for 2014 and 2015 on end of year (EoY) county-level refugee populations and their type of accommodation as well as on monthly individual offers of flats for rent from Germany’s leading online property broker, we find strong evidence for a negative effect of refugee immigration on rental prices for residential housing in Germany. An increase in the county-level EoY refugee share by one percentage point is associated with a lower average rental price of 0.57% in the period October to December 2015, and a lower average rental price of 0.97% in January to March 2016. Additional evidence suggests that this negative price effect may have been facilitated by increases in the share of refugees in decentralized accommodation. IV regressions that exploit for identification variation in intra-state distances between counties that house refugee reception centers and surrounding counties produce even stronger negative price effects. Our finding of a negative price effect is at odds with the majority of studies which have investigated the consequences of immigration for local property markets at the county or city level. These diverging results may reflect differences in natives’ perceptions of potential adverse externalities associated with refugee migration, differences of seemingly sufficient magnitude to successfully counteract and outweigh any positive demand-side driven stimulus of immigration for higher rental prices.

Keywords: Germany; refugees; Rents (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2018-01-01
New Economics Papers: this item is included in nep-mig and nep-ure
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Citations: View citations in EconPapers (19)

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Related works:
Working Paper: The 2015 European Refugee Crisis and Residential Housing Rents in Germany (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2018_156

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