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Assessing house prices in Germany: Evidence from an estimated stock-flow model using regional data

Author

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  • Kajuth, Florian
  • Knetsch, Thomas A.
  • Pinkwart, Nicolas

Abstract

Based on a stock-flow model of the housing market we estimate the relationship of house prices and explanatory macroeconomic variables in Germany using a regional panel dataset for 402 administrative districts. Using regional data exploits the variation across local housing markets and overcomes time-series data limitations. We take the regression residuals as a measure for deviations of actual house prices from their fundamental equilibrium level. The model specification allows to aggregate district-level residuals for various regional subsets. During the past two years for Germany as a whole single-family house prices appeared to be in line with their fundamental equilibrium level, whereas apartment prices significantly exceeded the fundamental price suggested by the model. The overvaluation of apartments is higher in towns and cities and most pronounced in the major seven cities, while single-family houses in cities appear to be only moderately above their fundamental levels.

Suggested Citation

  • Kajuth, Florian & Knetsch, Thomas A. & Pinkwart, Nicolas, 2013. "Assessing house prices in Germany: Evidence from an estimated stock-flow model using regional data," Discussion Papers 46/2013, Deutsche Bundesbank.
  • Handle: RePEc:zbw:bubdps:462013
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    References listed on IDEAS

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    Cited by:

    1. Oestmann Marco & Bennöhr Lars, 2015. "Determinants of house price dynamics. What can we learn from search engine data?," Review of Economics, De Gruyter, vol. 66(1), pages 99-127, April.
    2. Konstantin A. Kholodilin & Claus Michelsen & Dirk Ulbricht, 2014. "Speculative Price Bubbles in Urban Housing Markets in Germany," Discussion Papers of DIW Berlin 1417, DIW Berlin, German Institute for Economic Research.
    3. repec:prg:jnlpep:v:2017:y:2017:i:3:id:613:p:269-285 is not listed on IDEAS
    4. Darius Kulikauskas, 2015. "Measuring fundamental housing prices in the Baltic States: empirical approach," ERES eres2015_31, European Real Estate Society (ERES).
    5. Bienert, Sven & Sebastian, Steffen P. & Just, Tobias, . "Niedrigzinsumfeld und die Auswirkungen auf die Immobilienwirtschaft," Beiträge zur Immobilienwirtschaft, University of Regensburg, Department of Economics, number 8, July.
    6. Hiller, Norbert & Lerbs, Oliver W., 2016. "Aging and urban house prices," Regional Science and Urban Economics, Elsevier, vol. 60(C), pages 276-291.
    7. Lerbs, Oliver & Hiller, Norbert, 2015. "Aging and Urban House Prices," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113136, Verein für Socialpolitik / German Economic Association.
    8. Hana Hejlová & Michal Hlaváček & Luboš Komárek, . "A Comprehensive Method for House Price Sustainability Assessment in the Czech Republic," Prague Economic Papers, University of Economics, Prague, vol. 0, pages 1-17.
    9. repec:nbb:ecrart:y:2017:m:june:i:i:p:61-77 is not listed on IDEAS
    10. Konstantin Kholodilin, 2015. "Speculative Bubbles in Urban Housing Markets in Germany," ERSA conference papers ersa15p67, European Regional Science Association.
    11. Muellbauer, John & Geiger, Felix & Rupprecht, Manuel, 2016. "The housing market, household portfolios and the German consumer," Working Paper Series 1904, European Central Bank.

    More about this item

    Keywords

    fundamental house prices; regional house prices; housing demand and supply;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • 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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