Housing Market

The German housing market has experienced an unprecedented rise in prices in recent years. Although almost all regions of Germany have been affected by this development, there are still significant regional differences. For example, the increase in rental prices between 2008 and 2021 was more than twice as high in the seven largest cities as in sparsely populated rural areas - and even three and 3.5 times as high respectively for purchase prices for apartments and houses (own calculations based on RWI-GEO-REDX). How can these differences be explained? Which trends (demographic change, internal migration, immigration, etc.) have contributed to this? We examine these questions using detailed data from the RWI-GEO-REDX, based on data from ImmoScout24, Germany's largest real estate platform.

Housing prices and mobility are closely linked. On the one hand, immigration increases local demand for housing and thus leads to price increases. On the other hand, a high rent or purchase price level can also slow down further immigration. This can be a disadvantage for companies in major German cities and an advantage for companies in rural areas. The same applies to universities competing for students. By linking housing price data with administrative data (e.g., on first-year students), we are analysing the effects of the housing market on the mobility of (future) workers. The findings allow us to draw some important conclusions about regional inequalities in the light of current shortages of skilled labour.

Brausewetter, L., Thomsen, S. & Trunzer, J. (2024). Regional Supply and Demand Fundamentals in the German Housing Price Boom. German Economic Review, 25 (1), 1-36. https://doi.org/10.1515/ger-2023-0063.

Breyer, F. & Thomsen, S. (2024). Sollte der Staat die Mieten deckeln? In: Riphahn, R. et al. (Hrsg.), Wirtschaft verstehen, Zukunft gestalten, 164-174, Frankfurt am Main: Frankfurter Allgemeine Buch. ISBN: 978-3-96251-203-3. https://www.socialpolitik.de/de/sollte-der-staat-die-mieten-deckeln.

Göhausen, J. & Thomsen, S. (2024). Housing Costs, College Enrollment, and Student Mobility. IZA Discussion Paper No. 16726, Bonn. https://docs.iza.org/dp16726.pdf.

Thomsen, S., Vogt, D. & Brausewetter, L. (2020). Mietwohnungsknappheit in Deutschland: Ursachen, Instrumente, Implikationen. Wirtschaftsdienst, 100 (6), 461–467. https://doi.org/10.1007/s10273-020-2680-9.