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要旨

We study long-term returns on residential real estate in twenty-seven “superstar” cities in fifteen countries
over 150 years. We find that total returns in superstar cities are close to 100 basis points lower per year
than in the rest of the country. House prices tend to grow faster in the superstars, but rent returns are
substantially greater outside the big agglomerations, resulting in higher long-run total returns. The excess
returns outside the superstars can be rationalized as a compensation for risk, especially for higher covariance
with income growth and lower liquidity. Superstar real estate is comparatively safe.