Owner-occupied housing costs represent an important expenditure for households and should be included in the Harmonised Index of Consumer Prices. Conceptual and practical challenges must be resolved before this can be implemented. Estimates suggest that these costs would have a small impact on monetary policy. At the same time, different degrees of home ownership in the euro area mean that their inclusion ...
In 2020, Berlin enacted a rigorous rent-control policy: the “Mietendeckel” (rent freeze), aiming to stop rapidly growing rental prices. We evaluate this newly enacted but old-fashionably designed policy by analyzing its immediate supply-side effects. Using a rich pool of rent advertisements reporting asking rents and comprehensive dwelling characteristics, we perform hedonic-style Difference-in-Difference ...
The coronavirus pandemic has led to a deep worldwide economic crisis. In many countries, the construction industry has been impacted. In Germany, however, construction activity is one of the economic sectors that has remained largely stable: In 2020, the total construction volume in Germany is expected to have increased by around four percent to 444 billion euros after increasing by around eight percent ...
Cities worldwide have regulated peer-to-peer short-term rental platforms claiming that those platforms remove apartments from the long-term housing market, causing an in- crease in rents. Establishing and quantifying such a causal link is, however, challenging. We investigate two policy changes in Berlin to first assess how effective they were in regulating Airbnb, the largest online peer-to-peer short-term ...
Following World War I, rent control became a standard policy response to the housing shortage and the resulting rent increases. Typically, economists blame it for creating inefficiencies in the housing market and beyond. We investigate whether rental market regulations (including rent control, protection of tenants from eviction, and housing rationing) had any effects in a middle-income Latin American ...
The construction industry is increasingly becoming a key pillar of the business cycle in Germany. DIW Berlin’s construction volume calculation indicates a real expansion of construction services by around three percent each year over the next two years. In nominal terms, sales in the construction industry and its related sectors will grow by around 6.5 percent in 2020 and almost six percent in 2021. ...
Multivariate Adaptive Regression Spline (MARS) is a simple and powerful non-parametric technique that automatizes the selection of non-linear terms in regression models. Non-linearities and spatial effects are natural characteristics in numerous spatial hedonic pricing models. In this paper, we propose using the MARS data-driven methodology combined with the Instrumental Variables method in order to ...
The (re-)introduction of rent regulation in the form of rent controls, tenant protection or supply rationing is back on the agenda of policymakers in light of rent inflation in many global cities. While rent control as social policy promises short-term relief, economists point to their negative long-run effects on new construction. This paper present long-run data on both rent regulation and housing ...
The coronavirus pandemic, which began in December 2019 and is currently spreading rapidly around the world, is having a noticeable impact on the economy and thus also on the real estate market. Since the measures to curb the spread are causing economic activities to decline massively, small and medium-sized companies in the service, hospitality, and transport sectors in particular, but the self-employed ...
By Martin Gornig, Claus Michelsen, and Martin Bruns According to the German Institute for Economic Research construction volume forecast, the country’s construction industry will continue to flourish in the coming years. Companies can count on a rise in the nominal construction volume of around 7.5 percent in 2019 and 6.5 percent next year. The industry’s business cycle continues ...