Buy-to-Live vs. Buy-to-Let
UNIVERSITY OF TECHNOLOGY SYDNEY
Finance Department
Research Seminars in Finance
Paper Title: Buy-to-Live vs. Buy-to-Let: Real Estate Investors, Property Prices, and Neighborhoods
Speaker: Matthijs Korevaar, Erasmus School of Economics, Erasmus University Rotterdam
Time and Date: 12-1 pm, Wednesday 23rd October 2024 (AEDT)
Location: CB08.05.001, Level 5, Building 8, University of Technology Sydney, Australia (Map of campus)
Abstract: How does property ownership type affect house prices and neighborhoods? We investigate a Dutch legal ban on buy-to-let investments that exploits within-city and between-city variation in its coverage. The ban effectively removes investor purchases from the market, increasing owner-occupancy. We find banning investors does not reduce house prices and sales in affected neighborhoods and even weakly increases prices. We argue the local price impact of the ban is ambiguous as the reduction in investor demand is offset by neighborhood gentrification. Properties sold post-ban have fewer, older and richer occupants that are more likely to be Dutch-born and have moved-in over shorter distances. This is effect entirely driven by the fact that investor-purchased properties were catering to more mobile, lower-income residents, whose housing opportunities were ultimately reduced by the ban.
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Co-ordinator: Kenny Phua
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