Exploring the Determinants of Liquidity with Big Data – Market Heterogeneity in German Markets

Posted: 18 Jan 2017

See all articles by Marcelo Cajias

Marcelo Cajias

PATRIZIA AG; Universität Regensburg

Philipp Freudenreich

University of Regensburg

Date Written: January 16, 2017

Abstract

Purpose – The purpose of this paper is to examine the market liquidity (time-on-market) and its determinants for rental dwellings in the largest seven German cities with big data.

Design/methodology/approach – The determinants of time-on-market are estimated with the Cox proportional hazards model. Hedonic characteristics as well as socioeconomic and spatial variables are combined with different fixed effects and controls for non-linearity to maximise the explanatory power of the model.

Findings – Higher asking rent and larger living space decrease the liquidity on all seven markets, while dwelling’s age, the number of rooms and proximity to the city centre fasten the letting process. For the linear and non-linear hedonic characteristics heterogeneous implications are found.

Practical implications – The findings are of interest for institutional and private landlords as well as governmental organizations in charge of housing and urban development.

Originality/value – It is the first paper to deal with liquidity of rental dwellings in the seven most populated cities of Europe’s second largest rental market by applying the Cox proportional hazards model. Furthermore, the German rental market is of particular interest, as approximately 60% of all rental dwellings are owned by private landlords and the German market is organized polycentric.

Keywords: Liquidity/Time-on-market; Housing real estate; Big data; Cox proportional hazards model; Non-linearity

Suggested Citation

Cajias, Marcelo and Freudenreich, Philipp, Exploring the Determinants of Liquidity with Big Data – Market Heterogeneity in German Markets (January 16, 2017). Available at SSRN: https://ssrn.com/abstract=2900434

Marcelo Cajias (Contact Author)

PATRIZIA AG ( email )

Fuggerstr. 26
Augsburg, 86150
Germany
+49 (0) 151 17215198 (Phone)

HOME PAGE: http://www.patrizia.ag

Universität Regensburg ( email )

93040 Regensburg
D-93040 Regensburg, 93053
Germany

Philipp Freudenreich

University of Regensburg ( email )

93040 Regensburg
D-93040 Regensburg, 93053
Germany

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