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Aging and real estate prices in Germany

Author

Listed:
  • Philipp Breidenbach

    (RWI—Leibniz-Institute for Economic Research)

  • Philipp Jäger

    (RWI—Leibniz-Institute for Economic Research
    Federal Ministry of Labour and Social Affairs)

  • Lisa Taruttis

    (University of Duisburg-Essen)

Abstract

Exploiting regional heterogeneity in population dynamics across more than 10,000 municipalities in Germany, we provide robust empirical evidence that population aging depresses real estate prices and rents. Using millions of individual real estate listings and detailed demographic data at the municipality level, we estimate that average sales prices in 2020 would have been up to 12% higher if the population age distribution had been the same as in 2008. We show that population aging not only reduces prices but also increases the availability of real estate. In addition, we document substantial heterogeneity in price responses across dwelling type, property characteristics, and urban-rural status, suggesting that lower housing demand and life-cycle dissaving are driving our results. We predict that population aging will continue to exert downward pressure on house prices and exacerbate regional disparities in Germany.

Suggested Citation

  • Philipp Breidenbach & Philipp Jäger & Lisa Taruttis, 2024. "Aging and real estate prices in Germany," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 44(4), pages 383-401, December.
    • Handle: RePEc:spr:jahrfr:v:44:y:2024:i:4:d:10.1007_s10037-024-00210-2
    DOI: 10.1007/s10037-024-00210-2
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    More about this item

    Keywords

    Real Estate Prices; Population Aging; Germany;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • 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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