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Attitudes to immigration impact house prices, study finds

A correlation between attitudes towards immigration and house prices has been discovered by Deakin University. 

A new study by Deakin Business School has claimed that, while a rise in international migration boosts house prices, negative perceptions of migrants moderate that effect.

This theory is based on immigration having a “non-significant effect” on house prices in Australia.

In Australia, immigrants accounted for 28.22 per cent of the 2015 population, and house prices rose by 37.35 per cent in the decade to 2015, according to the Deakin study, which analysed 474 estimates of immigration’s impact on house prices in 14 countries. The percentage of Australians not in favour of having immigrant neighbours was 10.5 per cent.

In the UK, immigrants accounted for 13.2 per cent of the 2015 population, and house prices increased by just 51 basis points in the decade to 2015. The proportion of UK residents not in favour of having immigrant neighbours was higher, at 14.2 per cent.


Across the Tasman, 22.96 per cent of the 2015 population was comprised of immigrants in New Zealand, and house prices rose by 29.41 per cent in the decade to 2015. A smaller percentage of New Zealanders, or 5.9 per cent, were found to be not in favour living next to immigrants. 

In the decade to 2015, Canada recorded a 43.66 per cent boost in house prices, with immigrants accounting for 21.8 per cent of the 2015 population. Having immigrant neighbours was viewed less negatively in Canada, with 4.1 per cent expressing that they’re not in favour. 

Conversely, house prices declined by 23.52 per cent over the same period in the US, with 14.49 per cent of the 2015 population comprised of immigrants. Attitudes towards having immigrants as neighbours was more negative than most of its Western counterparts, with 13.6 per cent indicating they are not in favour. 

Commenting on the findings, Alfred Deakin professor of economics Chris Doucouliagos said: “Immigration increases the demand for housing and rental accommodation, but it might also affect amenities and the perceived desirability of the neighbourhoods most affected.”

Deakin researchers also conducted a “counterfactual analysis”, finding that “softened” attitudes towards immigrants would 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.”

House prices across Australia fell by about 10 per cent over the last year after a substantial run-up in house prices from 2012 to 2017.

[Related: HSBC economist disputes house price gloom]

Attitudes to immigration impact house prices, study finds
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Tas Bindi

Tas Bindi is the features editor on the mortgage titles and writes about the mortgage industry, macroeconomics, fintech, financial regulation, and market trends.  

Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business. 

You can email Tas on: This email address is being protected from spambots. You need JavaScript enabled to view it.



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