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The Prices of Residential Land in German Counties

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  • Gabriel S. Lee
  • Stefanie Braun

Abstract

We estimate changes in the value and price of residential land for 379 German counties (”Landkreise”) from 2014 to 2017 using a total of 42,685 observations. We use the two-step residual method that decomposes the value of a home into the value of the structure and land value. Despite the short time series, we show that the price of residential land has become relatively more expensive in the majority of German counties. More specifically, we show that the cumulative change in land values varies between 9% and 171% (excluding Berlin with exorbitant high increases of 668% and Saarland with a decrease of 18%) from 2014 to 2017. On average, the home values increased by 30% and 15% for West and East Germany respectively, whereas the land values increased by 108% and 91% for West and East Germany. Our findings imply that cycles in the German land values are more likely to affect the evolution of house prices more in the future than they did in the past. Moreover, our estimated land prices vary significantly to the current land price valuation by one of the German state governments (Hessen).

Suggested Citation

  • Gabriel S. Lee & Stefanie Braun, 2020. "The Prices of Residential Land in German Counties," Working Papers 194, Bavarian Graduate Program in Economics (BGPE).
    • Handle: RePEc:bav:wpaper:194_braunlee
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    Cited by:

    1. Gabriel S. Lee & Stefanie Braun, 2021. "Agglomeration Spillover Effects in German Land and House Prices at the City and County Levels," Working Papers 207, Bavarian Graduate Program in Economics (BGPE).
    2. Ahlfeldt, Gabriel M. & Heblich, Stephan & Seidel, Tobias, 2023. "Micro-geographic property price and rent indices," Regional Science and Urban Economics, Elsevier, vol. 98(C).
    3. Haroon Mumtaz & Roman Sustek, 2023. "Global house prices since 1950," Discussion Papers 2307, Centre for Macroeconomics (CFM).
    4. Alexander Daminger, 2023. "Homeowner Subsidies and Suburban Living: Empirical Evidence from a Subsidy Repeal," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 79(2), pages 111-145.
    5. Alexander Daminger, 2021. "Subsidies to Homeownership and Central City Rent," Working Papers 210, Bavarian Graduate Program in Economics (BGPE).
    6. Eisfeld, Rupert-Klaas & Just, Tobias, . "Die Auswirkungen der COVID-19-Pandemie auf die deutschen Wohnungsmärkte. Eine Studie im Auftrag der Hans-Böckler-Stiftung," Beiträge zur Immobilienwirtschaft, University of Regensburg, Department of Economics, number 26, August.

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    More about this item

    Keywords

    German Land prices; Land values; German Housing prices; Housing values; Construction costs; Replacement costs;
    All these keywords.

    JEL classification:

    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • 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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