Immigrant language barriers and house prices

Are language skills important in explaining the nexus between house prices and immigrant inflows? The language barrier hypothesis says that immigrants from a non common language country value amenities more than immigrants from common language countries. In turn, immigrants from non common language countries are less price sensitive to house price changes than immigrants from a common language country. Tests of the language barrier hypothesis with Swiss house prices show that an immigration inflow from a non common language country equal to 1% of an area's population is coincident with an increase in prices for single-family homes of about 4.9%. Immigrant inflow from a common language country instead has no statistically significant impact.

► Language barriers influence the location choice of immigrants. ► Non common language immigrants value immigrant amenities. ► Common language immigrants are sensitive to house prices. ► Non common language Immigrants have an empirical impact on Swiss house prices. ► Common language Immigrants have no empirical impact on Swiss house prices.