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Regional Variation in German Real Estate Prices: Socio-Economic and Pandemic Influences

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  • Andree Ehlert
  • Andreas Lagemann
  • Jan Wedemeier

Abstract

This study examines the real estate market in Germany at the district level, focusing on 401 NUTS 3 regions from 2012 to 2022. Using spatial econometric models, the analysis explores how socio-economic variables and COVID-19-related factors—including infection rates and mobility restrictions—affected regional property prices. Our results indicate that high infection rates and containment measures served as significant housing price drivers, with both direct effects within regions and indirect spillover effects to neighbouring regions. We find that these factors, along with socio-economic variables such as average age and childcare provision, contribute to spatial dynamics in property markets. Robustness checks across regional subgroups and different model specifications support these fin dings. The research contributes to the literature by quantifying the influence of socio-economic and pandemic-related factors on regional real estate price variations and providing evidence of spatial spillover effects. The findings highlight the need for regionally tailored real estate policies to address the diverse impacts of these factors on property markets in Germany, while also offering a framework for analysing similar dynamics in other countries.

Suggested Citation

  • Andree Ehlert & Andreas Lagemann & Jan Wedemeier, 2024. "Regional Variation in German Real Estate Prices: Socio-Economic and Pandemic Influences," Bremen Papers on Economics & Innovation 2402, University of Bremen, Faculty of Business Studies and Economics.
  • Handle: RePEc:atv:wpaper:2402
    DOI: https://doi.org/10.26092/elib/3527
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    References listed on IDEAS

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    More about this item

    Keywords

    Regional real estate prices; COVID-19 impact; socio-economic factors; spatial econometrics; NUTS 3 regions; Germany;
    All these keywords.

    JEL classification:

    • R1 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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