2024/11/14 by Filipa Sá · 1 voice
Economics, Econometrics and Finance · #Housing Market and Economics
paper · pdf · doi:10.1093/jeg/lbae043
openalex publication_date 2024/11/14 · openalex created_date 2025/10/10 · openalex updated_date 2026/08/01
Abstract I use administrative data on properties owned by overseas companies to study the effect of foreign investment on house prices, affordability, construction, and vacant properties in England and Wales. To address endogeneity, I construct an instrument for foreign investment based on political conditions abroad. I find that foreign investment increases house prices. This effect is stronger for more expensive homes but is present at all points of the distribution. Foreign investment reduces affordability and the number of vacant dwellings but has no effect on construction. There is no evidence of heterogenous effects across areas with different housing supply elasticities, since construction is unresponsive even in high-elasticity areas.