Aging and real estate prices in Germany

Philipp Breidenbach (), Philipp Jäger and Lisa Taruttis
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Philipp Breidenbach: RWI—Leibniz-Institute for Economic Research
Philipp Jäger: RWI—Leibniz-Institute for Economic Research
Lisa Taruttis: University of Duisburg-Essen

Review of Regional Research: Jahrbuch für Regionalwissenschaft, 2024, vol. 44, issue 4, No 1, 383-401

Abstract: Abstract Exploiting regional heterogeneity in population dynamics across more than 10,000 municipalities in Germany, we provide robust empirical evidence that population aging depresses real estate prices and rents. Using millions of individual real estate listings and detailed demographic data at the municipality level, we estimate that average sales prices in 2020 would have been up to 12% higher if the population age distribution had been the same as in 2008. We show that population aging not only reduces prices but also increases the availability of real estate. In addition, we document substantial heterogeneity in price responses across dwelling type, property characteristics, and urban-rural status, suggesting that lower housing demand and life-cycle dissaving are driving our results. We predict that population aging will continue to exert downward pressure on house prices and exacerbate regional disparities in Germany.

Keywords: Real Estate Prices; Population Aging; Germany (search for similar items in EconPapers)
JEL-codes: J11 R21 R31 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10037-024-00210-2

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