A climate-adjusted analysis of value and rent premia through energy-efficiency in German residential properties

The aim of the study is to provide evidence of the current debate on rising housing rents due to urban tourism in Berlin. Urban tourism has high economic importance for many urban destinations and has developed very strongly over the last years. According to the prevailing view, urban tourism triggers side-effects, which affect the urban housing markets with a lack of supply and increasing rents. The paper analyzes if urban tourism hotspots have impacts on the Berlin housing rents with two hedonic regression approaches: Conventional ordinary least squares (OLS) and generalized additive model (GAM). The regressions models incorporate housing characteristics as well as varying distance based measures.The research considers hotels, restaurants, holiday apartments and tourist attractions as constituents of tourism hotspots and is based on spatial analysis with geographic information systems (GIS). The results show clear evidence that rents are affected by urban tourism. Rents are higher, the more attractive the tourism hotspots are and vice versa. GAM outperforms the results of OLS and seems to be more appropriate for spatial analysis of rents across a city.