Political Risk Affects Real Estate Markets
Sam Monfared () and
Andrey Pavlov ()
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Sam Monfared: Simon Fraser University
Andrey Pavlov: Simon Fraser University
The Journal of Real Estate Finance and Economics, 2019, vol. 58, issue 1, 1-20
Abstract Using data from the recent referendum in Britain to leave the E.U., we document a link between political uncertainty and real estate values. Specifically, we find that real estate values in areas of London that have a high concentration of E.U. passport holders declined significantly more than the rest of the city following the Brexit vote. In addition, we find that areas with concentration of highly-educated residents also experienced a disproportionately large price decline. These findings suggest that real estate markets are forward looking, incorporate information quickly, and are segmented.
Keywords: Political risk; Real estate markets; Brexit (search for similar items in EconPapers)
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