Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/251006 
Authors: 
Year of Publication: 
2021
Series/Report no.: 
Working Paper No. WP 2021-12
Publisher: 
Federal Reserve Bank of Chicago, Chicago, IL
Abstract: 
A capital influx into local housing markets would be expected to increase house prices, but the spillover effect onto rental prices is theoretically ambiguous. I estimate both price impacts in U.S. residential housing markets using data from a boom in real estate purchases by buyers from China, which amounted to $200 billion of purchases made between 2010 and 2019. Using a novel method to measure these purchases and an instrumental variable for where purchases are made, I find a large positive house price impact. Consistent with investment q-theory, rents fall as constructions rise, especially in areas with elastic housing supply.
Subjects: 
Chinese investors
investment q-theory
house prices and rents
Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand
Housing Supply and Markets
International Investment
Long-term Capital Movements
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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