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The prices of residential land in German counties

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  • Braun, Stefanie
  • Lee, Gabriel S.

Abstract

We estimate changes in the value and price of residential land for 379 German counties (“Landkreise”) from 2014 to 2018 using a total of 42,647 observations. In doing so, we build a database for the cost of housing structures and residential land values at the county-level. We use the two-step residual method that decomposes the value of a home into its structure cost and land value. Despite the short time series, we show that the price of residential land has increased significantly more than the structure costs and house prices in most of the German counties. Specifically, the average land values increased by 27%, while the average structure and home values increased only by 14% and 20%, respectively. Our findings thus imply that cycles in the German land values are more likely to affect the evolution of house prices in the future. Furthermore, we show that our estimated land prices vary significantly to the current land price valuation in two of the German federal states (Hessen and Thüringen).

Suggested Citation

  • Braun, Stefanie & Lee, Gabriel S., 2021. "The prices of residential land in German counties," Regional Science and Urban Economics, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:regeco:v:89:y:2021:i:c:s0166046221000363
    DOI: 10.1016/j.regsciurbeco.2021.103676
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    Cited by:

    1. 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.
    2. Haroon Mumtaz & Roman Sustek, 2023. "Global house prices since 1950," Discussion Papers 2307, Centre for Macroeconomics (CFM).
    3. 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.
    4. Alexander Daminger, 2021. "Subsidies to Homeownership and Central City Rent," Working Papers 210, Bavarian Graduate Program in Economics (BGPE).
    5. 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).
    6. Ahlfeldt, Gabriel M. & Heblich, Stephan & Seidel, Tobias, 2023. "Micro-geographic property price and rent indices," Regional Science and Urban Economics, Elsevier, vol. 98(C).

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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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