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Inflation Protection from Homeownership: Long-Run Evidence 1811-2008

Real Estate Economics, Forthcoming

Posted: 3 Jan 2013

See all articles by Dirk Brounen

Dirk Brounen

Erasmus University Rotterdam (EUR) - Department of Financial Management; Erasmus Research Institute of Management (ERIM); Tinbergen Institute

Piet M. A. Eichholtz

University of Maastricht - Limburg Institute of Financial Economics (LIFE)

Marcel A.J. Theebe

ING Real Estate Investment

Stefan Straetmans

Maastricht University ; University of Antwerp - Faculty of Applied Economics

Date Written: January 3, 2013

Abstract

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

Suggested Citation

Brounen, Dirk and Eichholtz, Piet M. A. and Theebe, Marcel A.J. and Straetmans, Stefan, Inflation Protection from Homeownership: Long-Run Evidence 1811-2008 (January 3, 2013). Real Estate Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2196037

Dirk Brounen (Contact Author)

Erasmus University Rotterdam (EUR) - Department of Financial Management ( email )

P.O. Box 1738
Room T09-53
3000 DR Rotterdam
Netherlands

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 1 0408 2371 (Phone)
+31 1 0408 9017 (Fax)

HOME PAGE: http://web.eur.nl/fbk/dep/dep5/faculty/dbrounen

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands
120-551-3535 (Phone)

Piet M. A. Eichholtz

University of Maastricht - Limburg Institute of Financial Economics (LIFE) ( email )

P.O. Box 616
Maastricht, 6200 MD
Netherlands
+31 43 3883648 (Phone)
+31 43 3258530 (Fax)

Marcel A.J. Theebe

ING Real Estate Investment ( email )

P.O. Box 90463
2509 LL The Hague
Netherlands

Stefan Straetmans

Maastricht University ( email )

Tongersestraat 53
Maastricht, 6200 MD
Netherlands

HOME PAGE: http://www.stefanstraetmans.com

University of Antwerp - Faculty of Applied Economics ( email )

Prinsstraat 13
Antwerp, B-2000
Belgium

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