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The Heterogeneous Response of Real Estate Asset Prices to a Global Shock

Author

Listed:
  • Sandro Heiniger

    (University of St. Gallen)

  • Winfried Koeniger

    (University of St. Gallen; CESifo (Center for Economic Studies and Ifo Institute); Center for Financial Studies (CFS); IZA Institute of Labor Economics; Swiss Finance Institute)

  • Michael Lechner

    (University of St. Gallen - Swiss Institute for Empirical Economic Research)

Abstract

We estimate the transmission of the pandemic shock in 2020 to prices in the residential and commercial real estate market by causal machine learning, using new granular data at the municipal level for Germany. We exploit differences in the incidence of Covid infections or short-time work at the municipal level for identification. In contrast to evidence for other countries, we find that the pandemic had only temporary negative effects on rents for some real estate types and increased asset prices of real estate particularly in the top price segment of commercial real estate.

Suggested Citation

  • Sandro Heiniger & Winfried Koeniger & Michael Lechner, 2022. "The Heterogeneous Response of Real Estate Asset Prices to a Global Shock," Swiss Finance Institute Research Paper Series 22-86, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2286
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    More about this item

    Keywords

    Real estate; Asset prices; Rents; Covid pandemic; Short-time work; Affordability crisis.;
    All these keywords.

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • 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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