Hybrid seminar: Buy-to-Live vs. Buy-to-Let: The Impact of Real Estate Investors on Housing Costs and Neighborhoods
On Thursday March 21st, 2024, Matthijs Korevaar (Erasmus University Rotterdam) will give a presentation titled: "Buy-to-Live vs. Buy-to-Let: The Impact of Real Estate Investors on Housing Costs and Neighborhoods." To attend this seminar, please send an e-mail to Simone Pailer (S.Pailer@cpb.nl). You will be registered at the reception or will receive a Webex invitation via Outlook.
How do buy-to-let investors impact local housing markets and the composition of neighborhoods? We investigate this question by examining a Dutch legal ban on buy-to-let investments, exploiting quasi-experimental variation in its coverage. The ban effectively reduced investor purchases and increased the share of first-time home-buyers, but did not have a discernible impact on house prices or the likelihood of property sales. The ban did increase rental prices, consistent with reduced rental housing supply. Furthermore, the policy caused a change in neighborhood composition as tenants of investor-purchased properties tend to be younger, have lower incomes, and are more likely to have a migration background. Our results suggest rental investors influence local housing conditions primarily through changing the residential composition of neighborhoods rather than direct house price effects.