Regional Variation in German Real Estate Prices: Socio-Economic and Pandemic Influences

Abstract

This study examines the real estate market in Germany at the district level, focusing on 401 NUTS 3 regions from 2012 to 2022. Using spatial econometric models, the analysis explores how socio-economic variables and COVID-19-related factors—including infection rates and mobility restrictions—affected regional property prices. Our results indicate that high infection rates and containment measures served as significant housing price drivers, with both direct effects within regions and indirect spillover effects to neighbouring regions. We find that these factors, along with socio-economic variables such as average age and childcare provision, contribute to spatial dynamics in property markets. Robustness checks across regional subgroups and different model specifications support these fin dings. The research contributes to the literature by quantifying the influence of socio-economic and pandemic-related factors on regional real estate price variations and providing evidence of spatial spillover effects. The findings highlight the need for regionally tailored real estate policies to address the diverse impacts of these factors on property markets in Germany, while also offering a framework for analysing similar dynamics in other countries.