Real Estate as a Luxury Good: Non-Resident Demand and Property Prices in Paris

@inproceedings{Cvijanovic2017RealEA,
  title={Real Estate as a Luxury Good: Non-Resident Demand and Property Prices in Paris},
  author={D. Cvijanovic and C. Spaenjers},
  year={2017}
}
This paper examines how the international demand for luxury consumption affects the real estate market in global hotspots. Using a unique data set of housing transactions in Paris, we find that (i) non-resident foreigners crowd out residents in highly desirable areas of the city, especially in good times; (ii) these non-residents overpay and realize lower capital gains when reselling; and (iii) purchases by non-resident foreigners have a causal positive effect on price levels. Our results… Expand
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