How Does Immigration Affect the Housing Market? Evidence from Italy

Abstract

Worldwide migration flows have been gaining momentum over the past years, leading to a significant population increase in Italy. This article uses 2018 tax and administrative records to analyse the recent spatial patterns of migration flows, the level of fiscal integration of immigrants and their impact on the Italian real estate market. The results show that in 2018 about 10% of the total taxpayers were foreign citizens with declared incomes below the national average. Looking at the housing market, the migrants’ homeownership of real estate property could become an important factor in explaining the demand for owner-occupied housing in northern urban areas, while in the South “transit” immigration appears to be prevalent. As regards the effects of migration on the housing prices, results indicate that immigration positively and significantly affects house prices as well as lease fees.