The Impact of Refugees on House Prices in European Countries

This paper investigates the causal impact of refugee inflows on housing prices across European countries following the 2015–16 asylum shock. Using a panel of 27 European countries from 2010 to 2023, we combine UNHCR data on refugees per 1,000 residents with Eurostat’s harmonized House Price Index (HPI). Baseline two-way fixed-effects models show that contemporaneous refugee growth is positively associated with housing price growth, while lagged inflows have a negative effect, consistent with short-run demand pressure followed by market adjustment. However, these correlations may be driven by endogenous refugee sorting into stronger housing markets. To address this, we implement a Bartik-style shift-share instrumental variable based on pre-crisis settlement patterns and origin-country refugee supply shocks. The instrument is strong and highly significant in the first stage. In the second stage, instrumented refugee inflows have no statistically significant effect on national-level housing prices. These results indicate that refugee arrivals do not causally affect aggregate housing prices in Europe, and that observed correlations largely reflect underlying macroeconomic and housing market dynamics rather than migration pressures.