Paying a Premium Only in Native Neighborhoods: The Role of Migrant Share in Shaping Housing Price Differentials in the Netherlands

Understanding housing price differentials across nativity, gender, or racial groups is crucial because housing costs influence economic well-being, wealth accumulation, and long-term security. While extensively studied in the U.S., similar research is limited in Europe. This study extends U.S. analyses of racial disparities to examine nativity disparities in the Netherlands by investigating intra- and inter-neighborhood price differentials among migrant, mixed, and native households using pooled data from the 2015 and 2018 Housing Research Netherlands surveys. Classifying neighborhoods as native, mixed, and migrant, the study identifies both similarities and differences with the U.S. context. First, negative associations between migrant shares and housing prices are more pronounced in native neighborhoods than in mixed or migrant neighborhoods. Second, upward tipping points driving price increases as migrant shares rise are not observed in the Dutch context; instead, downward tipping effects are identified. Additionally, intra-neighborhood price differentials vary across the three neighborhood types. Migrant households in native neighborhoods pay, on average, 7.83% more for housing compared to native households, while no such premiums are observed in mixed neighborhoods or among mixed households. These findings highlight the influence of neighborhood migrant or native shares in shaping price differentials, suggesting mechanisms such as housing discrimination and limited bargaining power faced by migrant households. The study underscores the need for further research, such as utilizing repeat-sales transaction data, to more precisely identify the causes behind these housing price disparities in the Netherlands.