Political Uncertainty and Residential Development: Empirical Findings from Germany

Julius Range and Lars Jagemann

ERES from European Real Estate Society (ERES)

Abstract: This study examines how recurrent changes in policy approaches and measures have affected housing construction activity and housing transactions in Germany. The increasing uncertainty of market participants due to these changes and the subsequent adjustments of the market form the basis of many studies in this field. In order to examine the political unpredictability and thus establish a link to the real estate construction sector, a real estate-specific, regionally differentiated index is developed from several reports. In doing so, we observe regional as well as national newspaper articles from 2010 onwards. In addition to the private transaction volume, we also analyze the main determinants of property development decision making. We have found that political changes and housing activity are related. Thus, due to an external shock, private real estate transactions are expceted to decline, which therefore affects the attitude of developers. The results of the study prove the influence of political changes on housing construction as well as transactions and contribute to the traceability of German housing activity.

Keywords: Housing Policy; political uncertainty; Real Estate Development; Sentiment Analysis (search for similar items in EconPapers)
JEL-codes: R3 (search for similar items in EconPapers)
Date: 2023-01-01
New Economics Papers: this item is included in nep-ure
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2023_150

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