Inflation Protection from Homeownership: Long-Run Evidence 1811-2008
Real Estate Economics, Forthcoming
Posted: 3 Jan 2013
Date Written: January 3, 2013
This paper examines the inflation hedging capacity of the private home. We employ unique long-term data for inflation, house price dynamics and rents for Amsterdam dating back to 1814. We analyze inflation protection using various methodological approaches, periods, and investment horizons. Our Amsterdam data show that homeownership offers protection against expected inflation for relatively long investment horizons, especially in periods when inflation is persistent. The hedging capacities of housing regarding unexpected inflation are weak.
Keywords: inflation hedging, house prices, investment horizons
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