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on Housing and Real Estate |
| By: | Katja Gehr; Linus Kraft; Michael Pflüger |
| Abstract: | This paper establishes a novel city size premium which may be termed the capitalization premium. Real estate investors derive benefits from investing in larger cities, most notably lower housing risk and/or higher expected rent growth. Standard asset valuation implies that, given the level of rents, investors are willing to pay increasingly higher housing prices as city size increases, a capitalization premium. Enabled by fine-grained microgeographic property prices and rents and an estimation strategy combining fixed-effects and instrumental variables, the key contribution of this paper is to identify the relationship between city size and the capitalization rate and to provide an estimate of the magnitude of this capitalization premium. We also spell out key implications of this finding for urban economics and macroeconomics. |
| Keywords: | agglomeration, rents, housing prices, price-rent ratio, capitalization |
| JEL: | R10 R23 R31 R51 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12430 |
| By: | Blanco-Arroyo, Omar; Esteve, Vicente; Prats, Maria A. |
| Abstract: | This study investigates the co-explosivity between Spain’s nominal house price index and the housing credit-to-GDP ratio over the period 1971–2024, with particular emphasis on the housing bubble years from 1998 to 2008. Applying the framework proposed by Chen et al. (2017), the analysis reveals an asymmetric relationship: house prices exhibit a stronger sensitivity to credit expansion than credit does to price increases, underscoring the disproportionate influence of credit on housing market dynamics. During the 1998–2008 bubble phase, the relationship becomes more symmetric, suggesting a feedback loop in which relaxed lending standards fueled housing demand, while rising prices reinforced further credit growth. This period is characterized by tighter coupling between the two variables, stronger co-movement, and faster correction dynamics—indicative of speculative lending behavior. The findings highlight the importance of monitoring credit conditions to better understand and manage housing market volatility. |
| Keywords: | co-explosivity; co-moving systems; explosive behavior; house prices; housing credit; housing market |
| JEL: | C22 E31 E44 E51 G21 R31 |
| Date: | 2026–03–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:137308 |
| By: | Duk Gyoo Kim; In Do Hwang |
| Abstract: | Population aging and the sustainability of retirement financing are critical challenges facing many developed economies. In South Korea, elderly poverty remains a critical issue, despite widespread homeownership among older adults. Although the home pension program allows retirees to unlock housing wealth, uptake remains below 2% as of 2024. Using a large-scale survey of adults aged 55–79, we conduct an information provision experiment to assess how policy reforms and belief corrections affect demand. We find that enrollment intention rises by 6 percentage points when monthly pension payments are adjusted with house price changes, and by 5 percentage points when bequest conditions are made more flexible. Notably, merely informing that the fixed monthly payments—often perceived as disadvantageous during housing price increases—do not result in a loss when house prices rise because the amount bequeathed to their children increases accordingly, led to a 7%p increase in enrollment intention. Our results suggest that addressing informational barriers may be as effective as structural reforms in increasing program uptake. |
| Keywords: | home pension, reverse mortgage, survey experiment |
| JEL: | D14 C93 H55 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12477 |
| By: | Gabriel Ahlfeldt (HU Berlin); Stephan Heblich (University of Toronto); Tobias Seidel (University of Duisburg-Essen); Fan Yin (HU Berlin, Berlin School of Economics) |
| Abstract: | We construct a new micro-geographic commercial rent index for Germany to study the capitalization of agglomeration economies into floor space prices. In large local labor markets, commercial rents decline by -17% per kilometer from the central business district, compared to 13% for residential rents, reflecting stronger agglomeration benefits at the center. Commercial rents in central business districts increase with local labor market size at an elasticity of 15%, implying that wage responses capture only about half of the agglomeration effect on total factor productivity. |
| Keywords: | floor space; rents; spatial equilibrium; total factor productivity; |
| JEL: | L2 R3 |
| Date: | 2026–02–09 |
| URL: | https://d.repec.org/n?u=RePEc:rco:dpaper:563 |
| By: | Janosch Brenzel-Weiss; Winfried Koeniger; Arnau Valladares-Esteban |
| Abstract: | We calibrate a lifecycle portfolio-choice model of homeowners facing uninsurable income risk to show that tax deductions for mortgage interest payments and voluntary pension contributions have sizable effects on household portfolios and macroprudential risks. The deductions reduce the after-tax cost of debt and increase the after-tax return of pension savings so that the mortgage incidence increases and portfolios shift from home equity and liquid assets towards pension savings. Because the consumption responses to a house-price decline are heterogeneous, the distribution of household debt shapes the quantitative effect of the tax deductions on the homeowners' resilience after a house price bust. |
| Keywords: | mortgage amortization, tax incentives, household consumption, portfolio choice, housing busts, economic stability, macroprudential policy |
| JEL: | D14 D15 D31 E21 G11 G21 H24 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12436 |
| By: | Giulio Breglia (Gran Sasso Science Institute); Marco Modica (Gran Sasso Science Institute) |
| Abstract: | Disasters disrupt socio-economic systems unevenly, and their spatial im pacts are often derived from pre-existing territorial vulnerabilities. Given this evidence, this paper investigates the spatial dimensions of post-disaster recov ery by analysing the housing market in the aftermath of the 2009 L’Aquila earthquake. We adopted a two-stage methodology that combines the Synthetic Control Method (SCM) and Diff-in-Diff (DiD) to evaluate recovery trajectories across six spatial categories, underlining spatial heterogeneity in recovery dy namics. The results reveal significant variation in the recovery patterns, with independent municipalities performing better than urban hamlets. This study underscores the importance of fine-grained spatial analysis for post-disaster pol icy design. These findings have significant implications for resilience planning and the development of targeted recovery strategies. |
| Keywords: | Disasters; Housing; Synthetic Control Method; Regional; Counterfac tual |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:ahy:wpaper:wp72 |
| By: | Sven Heim; Mario Liebensteiner; Félix Michelet |
| Abstract: | Wind turbines offer significant environmental benefits but also create negative local externalities, such as noise and visual pollution, which can lead to local tensions and community resistance against the energy transition. This paper examines negative and positive externalities associated with wind turbine siting in Germany. Utilizing an instrumental variables approach, we find that wind turbine siting decreases house purchase prices by 1.9% in affected municipalities, with this adverse effect being most pronounced for the first turbines installed. Additionally, the siting of wind turbines reduces local tourism, apartment rents, and leads to fewer building permits being issued for apartments and houses, exacerbating existing housing shortages. On the positive side, each installed wind turbine increases a municipality's local tax capacity by 1.8\% through higher commercial tax revenues. Our findings suggest that the negative externalities can be mitigated by investing the increased tax revenue into local amenities and public services, thereby compensating for the adverse effects of wind turbines. |
| Keywords: | wind power, externalities, hedonic pricing, NIMBY, local disamenities |
| JEL: | H2 Q4 Q5 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12478 |
| By: | Kawasoe, Yasuhiro |
| Abstract: | Why do some countries have more disaster-resilient housing than others, even at similar income levels? This paper addresses this question using a novel data set on housing robustness in 150 countries and proposes a "two-stage housing quality ladder" framework. The analysis reveals that the constraints on housing improvement fundamentally differ across development stages. In the first stage—eliminating fragile housing—household poverty is the binding constraint, showing strong negative associations with housing quality and nonlinear effects that diminish at extreme poverty levels. Progress depends primarily on poverty alleviation and basic governance capacity. In the second stage—achieving robust, engineered construction—household poverty becomes statistically insignificant. Instead, national income, construction-sector institutions (building codes, permit systems, and inspections), and overall institutional quality emerge as the critical determinants. The paper further demonstrates that countries learn from disaster experience, but this learning is hazard-specific and mediated by governance quality. Earthquake experience consistently drives improvements in housing resilience, particularly in well-governed countries, while storm and flood experiences show weaker direct effects but significant interactions with poverty levels. These findings carry important policy implications: disaster risk reduction investments should emphasize poverty alleviation and basic governance in low-income countries eliminating fragile housing, while middle- and high-income countries should prioritize construction-sector regulatory capacity and code enforcement systems to achieve robust engineering standards. Earthquake-prone countries benefit particularly from institutional strengthening that enables sustained learning from repeated seismic events. |
| Date: | 2026–02–23 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11319 |
| By: | Gąsiorowski, Paweł; Skudelny, Frauke; Albanese, Alessandra; Baena, Antoine; Banu, Elena; Catapano, Gennaro; Ćirjaković, Jelena; Claussen-Friman, Sandra; de l’Estoile, Etienne; Garcia, Thomas; Hejlová, Hana; Ingefeldt, Niclas Olsen; Kimmel, Christoph; Marquardt, Philipp; Miranda, Raquel; Reginster, Alexandre; Roldão, Mário; Ryan, Ellen; Schepens, Thomas; Serra, Diogo; Silva, Fatima |
| Abstract: | This paper explores ways in which borrower-based measures (BBMs) could be applied to commercial real estate (CRE) lending, focusing on suitable metrics and scope. BBMs have already proven to be effective in mitigating credit risks in residential real estate lending by curbing excessive credit growth, limiting high-risk loans and strengthening lender resilience. However, implementing these measures in CRE lending is more complex due to the diverse and intricate financing structures commonly found in CRE markets. BBMs for CRE lending could be effective in mitigating systemic risk by targeting the following metrics: debt service and interest coverage ratios (DSCR/ICR) and limits on aggregate indebtedness at the firm level; and/or loan-to-value (LTV) ratios at the credit facility level. A key challenge is the threat of regulatory leakage, as CRE borrowers often rely on multiple financing sources. This is why firm-level metrics are recommended, aligning with existing market practices and minimising implementation complexity. By limiting credit access from regulated financial entities to CRE firms exceeding these thresholds, such a framework would also indirectly cover lending by non-regulated lenders. National authorities should have the flexibility to calibrate and activate these measures, tailoring them to the unique characteristics of their CRE markets. This paper also aligns with the ESRB Recommendation to the European Commission ESRB/2022/9 D, which calls for activity-based macroprudential tools to address CRE vulnerabilities and to prevent regulatory arbitrage. The paper outlines the rationale, implementation strategy and forward-looking considerations for CRE BBMs. JEL Classification: G20, G28, R33 |
| Keywords: | borrower-based measures, commercial real estate, lending, system-wide approach |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:srk:srkops:202629 |