The Rate of Return on Real Estate: Long-Run Micro-Level Evidence

Inflation protection from homeownership: Long-run evidence, 1814–2008

David Chambers, Christophe Spaenjers, Eva Steiner and Stijn Van Nieuwerburgh

The Review of Financial Studies, 2021, vol. 34, issue 8, 3572-3607

Abstract: Real estate—housing in particular—is a less profitable investment in the long run than previously thought. We hand-collect property-level financial data for the institutional real estate portfolios of four large Oxbridge colleges over the period 1901–1983. Gross income yields initially fluctuate around 5%, but then trend downward (upward) for agricultural and residential (commercial) real estate. Long-term real income growth rates are close to zero for all property types. Our findings imply annualized real total returns, net of costs, ranging from approximately 2.3% for residential to 4.5% for agricultural real estate.

JEL-codes: G11 G23 N20 R30 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (8)

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