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Housing capital gains across the income distribution

Author

Listed:
  • Bäckman, Claes
  • D'Lima, Walter
  • Khorunzhina, Natalia

Abstract

We show that high-income buyers earn higher capital gains on housing using detailed transaction data from Denmark. Geographic location statistically accounts for nearly all the difference, with little role for aggregate market timing, property type, or other buyer characteristics. This finding is consistent with income-based sorting, whereby higher-income households systematically sort into locations with persistently higher price growth. We test whether credit conditions shape access to locations with higher house-price growth and find no detectable change in buyer composition by income rank around major credit expansions and contractions.

Suggested Citation

  • Bäckman, Claes & D'Lima, Walter & Khorunzhina, Natalia, 2026. "Housing capital gains across the income distribution," SAFE Working Paper Series 467, Leibniz Institute for Financial Research SAFE.
    • Handle: RePEc:zbw:safewp:336814
    DOI: 10.2139/ssrn.6173064
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    Keywords

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    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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