Housing capital gains across the income distribution

Claes Bäckman, Walter D'Lima and Natalia Khorunzhina

No 467, SAFE Working Paper Series from Leibniz Institute for Financial Research SAFE

Abstract: We show that high-income buyers earn higher capital gains on housing using detailed transaction data from Denmark. Geographic location statistically accounts for nearly all the difference, with little role for aggregate market timing, property type, or other buyer characteristics. This finding is consistent with income-based sorting, whereby higher-income households systematically sort into locations with persistently higher price growth. We test whether credit conditions shape access to locations with higher house-price growth and find no detectable change in buyer composition by income rank around major credit expansions and contractions.

Keywords: Housing; wealth inequality; affordability; spatial sorting; inequality (search for similar items in EconPapers)
JEL-codes: D31 G51 R31 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safewp:336814

DOI: 10.2139/ssrn.6173064

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