Abstract
The influx of rich real-estate buyers into local housing markets would increase house prices, but the spillover effect onto rental prices is theoretically ambiguous. I estimate rich buyers’ impact during the Chinese buying boom in US residential housing markets, with $200 billion of purchases made between 2010 and 2019. I identify Chinese holdings using housing deed records and names, and estimate their causal impact by instrumenting for Chinese buyers’ demand using flight time from China due to flight route changes. I find a large positive house price impact. Consistent with investment q-theory, rents fall as constructions rise, especially in areas with elastic housing supply.
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