Aging and Urban House Prices

32 Pages Posted: 28 Apr 2015

See all articles by Norbert Hiller

Norbert Hiller

University of Münster

Oliver Lerbs

University of Münster

Date Written: March 23, 2015

Abstract

This paper investigates the long-run relationships between the size and age composition of a city's population and the price of local housing. For estimation purposes, we combine city-level demographic information with housing price data for 87 cities in Germany over the period 1995-2012. Employing a panel error correction framework that accounts for the evolution of city income and other controls, we find that urban house prices perform stronger in cities that grow or age less rapidly. A combination of the empirical estimates with current population projections suggests that population aging will exert considerable downward pressure on urban house prices in upcoming years.

Keywords: Urban house prices, demographic change, Germany

JEL Classification: G12, J11, R31

Suggested Citation

Hiller, Norbert and Lerbs, Oliver, Aging and Urban House Prices (March 23, 2015). ZEW - Centre for European Economic Research Discussion Paper No. 15-024, Available at SSRN: https://ssrn.com/abstract=2599484 or http://dx.doi.org/10.2139/ssrn.2599484

Norbert Hiller

University of Münster ( email )

Schlossplatz 2
Muenster, D-48149
Germany

Oliver Lerbs (Contact Author)

University of Münster ( email )

Schlossplatz 2
Muenster, D-48149
Germany

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