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http://hdl.handle.net/10419/57924
  
Title:House prices, housing development costs, and the supply of new single-family housing in German counties and cities PDF Logo
Authors:Lerbs, Oliver W.
Issue Date:2012
Series/Report no.:CAWM Discussion Paper / Centrum für Angewandte Wirtschaftsforschung Münster 57
Abstract:This paper employs panel data on 413 German counties and cities from 2004 to 2009 to investigate the supply of new single-family housing in local housing markets. New local housing supply is measured by the annual number of construction permits in relation to the existing single-family housing stock. This supply indicator is econometrically related to existing home prices and new housing development costs, which include the costs of housing construction and vacant land in a given location. The results suggest that both higher prices for existing homes and recent increases in development costs are positively associated with local single-family home permit rates. Instead, higher levels of development costs turn out to dampen construction activity. The average local price elasticity of new single-family home supply is considerably less than one, with surprising differences across the urban hierarchy.
Subjects:new housing supply
local housing markets
panel data
JEL:R12
R31
C31
Document Type:Working Paper
Appears in Collections:CAWM Discussion Papers, Universität Münster

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