Home News
Love thy neighbour to see a rise in house prices: Deakin study

Immigration does increase house prices, but that effect is reduced if a population views new migrants negatively, according to a world-first analysis from Deakin University.

The Deakin Business School study, recently published in the Journal of Housing Economics, is the first comprehensive statistical review of the global evidence to evaluate how attitudes to immigration affect house prices.

It found that while house prices do increase in line with increases to immigration that effect diminishes in countries less welcoming to the newcomers.

Alfred Deakin Professor of Economics Chris Doucouliagos, co-director of the Deakin Lab for the Meta-Analysis of Research (DeLMAR), said the global stock of immigrants had more than tripled between 1960 and 2015, from 72 million to 243 million.

“The sharp rise in international immigration is a pressing social and economic issue,” Professor Doucouliagos said.

“Our analysis is especially timely against the backdrop of a worldwide spread of populist and nationalist politics and the rising need to provide adequate housing for dislocated populations and affordable housing for younger generations.

“So we wanted to know if immigration does affect house prices. But also the impact of deep-seated attitudes towards immigration. Specifically whether the attitudes of locals towards immigrants moderates the impact of immigration.”

The meta-analysis looked at 474 estimates of immigration’s impact on house prices in 14 different destination countries, including Australia, Canada, New Zealand, the UK and the USA.

“We found that immigration increases house prices in the aggregate. However using data from the World Values Survey, we show that attitudes to immigrants moderates this effect,” Professor Doucouliagos said.

“In countries where locals dislike living next-door to immigrants, for instance, immigration has a smaller effect on house prices, although we find no evidence that house prices sink as a result of immigration.”


Percentage not in favour of immigrant neighbours

Immigrants as percentage of 2015 population

House price change in decade to 2015

















New Zealand




Data on attitudes to immigrants are regularly collected from the World Values Survey. Specifically, Professor Doucouliagos and his colleagues looked at the question: ‘On this list are various groups of people. Could you please mention any that you would not like to have as neighbours?’

They then looked at the percentage of people from each country included in the meta-analysis who responded ‘Immigrants/foreign workers’.

“For example in the UK, immigration has had a non-significant effect on house prices, but our analysis suggests that may be in part because of negative attitudes towards immigrants,” Professor Doucouliagos said.

“We see the same effect in Australia, and this goes against the theory that increased immigration means higher house prices.

“Immigration increases the demand for housing and rental accommodation, but it might also affect amenities and the perceived desirability of the neighbourhoods most affected.”

Researchers also carried out a ‘counterfactual analysis’ to look at what might happen to house prices if attitudes to immigrants softened to similar levels of the most accepting sample country.

They found immigration would then increase house prices in most countries.

“Our findings are also consistent with other research that people like living near their kin and this motivates where they choose to buy or rent,” Professor Doucouliagos said.

“The tendency of new immigrants to live in the same areas as previous generations of immigrants, combined with a disinclination for local residents with negative attitudes towards immigration to reside near immigrants, lessens the relationship between immigration and house prices.”

Originally published on Deakin Media

Posted in News