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Is tourism a primary driver of inflation in house prices? The case of European countries

Author

Listed:
  • José Alberto Fuinhas

    (University of Coimbra)

  • Daniela Castilho

    (University of Coimbra)

  • Volkan Kaymaz

    (Istanbul Yeni Yuzyil University)

  • Matheus Koengkan

    (University of Coimbra Institute for Legal Research (UCILeR), University of Coimbra)

Abstract

In this empirical investigation, the influence of tourism on housing prices was studied for 13 European Union countries from 2005 to 2019 using cs-ARDL and Quantile cs-ARDL econometric approaches. The findings reveal a positive effect running from the tourism sector (represented by tourism revenues and the number of arrivals) to housing price indices, indicating that this industry significantly impacts real estate markets. Moreover, the results show that economic growth, bank credit, and population growth drive house prices. These outcomes have significant implications for policymakers, highlighting the dual nature of tourism’s impact and the need for a careful balance between promoting tourism as an economic strategy and ensuring housing affordability for residents.

Suggested Citation

  • José Alberto Fuinhas & Daniela Castilho & Volkan Kaymaz & Matheus Koengkan, 2025. "Is tourism a primary driver of inflation in house prices? The case of European countries," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 72(2), pages 1-28, December.
    • Handle: RePEc:spr:inrvec:v:72:y:2025:i:2:d:10.1007_s12232-025-00498-7
    DOI: 10.1007/s12232-025-00498-7
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