Do Immigrants Raise Housing Prices?

If Indian cities were truly global, real estate prices would have been much higher, and homebuyers, architects, developers, designers, and construction workers would have had access to better methods of construction and different forms of building. This is not all. When there are more immigrants, real estate prices would rise.

Throughout the world, immigrants are seen as a liability. However, if more immigrants come to, say, Delhi, who would benefit from it? The residents of Delhi would benefit from it. The food culture in Delhi, for example, is richer and more diverse than in small cities because there are people from all parts of the country. For the same reason if people from different parts of the world are free to migrate to Delhi and do business here, people will have more choice.

This is true not just of food, but of every business including clothing, grocery, among others. Employers will have access to a wider pool of employees to choose from, and vice versa. This also leads to rise in real estate prices in Delhi, because more choice will make the city a richer place to live in.

There is more to this. When there are more immigrants, the demand for real estate also rises including both residential and commercial. When more people need housing and office space, the price of housing and office space will rise. But, this is not a hard and fast rule. If supply rises faster than demand, housing prices may not rise or rather fall. The implication is that if developers are free to build, even if large numbers of people migrate to a city, housing will remain affordable. But, if developers are not free to build, demand will rise when supply remains constant. So, housing will become more expensive if policies prevent developers from building as many homes as people want. This, however, is not a bad thing for native. For example, residents of a city usually own most real estate in that city. So, when migrants come in and real estate prices rise, natives benefit tremendously.

According to some studies, a one-per cent rise in immigration will raise real estate prices in a city by about one per cent. So, a great way to raise real estate prices in a city is to attract more and more migrants. Actually, real estate prices rise because a city becomes more liveable when there are more migrants. Contrary to the claim that migration and rising population have made cities unliveable, the rising real estate prices is proof enough that cities have become a lot more liveable in the past few decades. This does not mean that rising population will make cities more liveable in every aspect. This means that despite everything, city has become a more attractive package deal.