Spatial and Temporal Diffusion of Housing Prices in the Presence of a Linguistic Border: Evidence from Belgium

This paper investigates the ripple effect hypothesis for Belgium and is especially interested in the existence of potential border effects arising from the language border that divides the country in two large linguistic regions, Flanders and Wallonia. We find that housing prices in districts located along the north-south axis are highly integrated, while those in more peripheral eastern and western districts converge almost exclusively with neighbouring districts in the same linguistic region. Where a similar model might only applied to a few multilingual countries, we provide some valuable insights on the mechanisms responsible for the observed ripple—and border effects.