New German Highway Infrastructure and the Impacts on Residential Real Estate Prices

Abstract

Germany’s 1990 reunification necessitated highway connections between an underdeveloped region and a western country. The 2009/2013 German Autobahn highway A38 completion/additions alleviated congestion, enhanced connectivity, and increased pollution/noise. Using German residential real estate price data spanning 2007-2017, we find shorter drive times to the A38 raised prices; and direct proximity lowered prices. Our results exceed connectivity estimates of a German local roads study and some Western European highway studies, due to A38 newly linking the east/west of Germany. Our highway estimates are in the mid-range of German transit studies, implying German transit may impact real estate prices more than highways.

Keywords: Real Estate Prices, Highways, Germany

JEL Classification: R4, R2