Spatial dynamics of real estate prices: Socio-economic and pandemic effects in German Regions

This study examines the real estate market in Germany at the district level, focusing on all 401 NUTS 3 regions from 2012 to 2022. Using spatial econometric models, the analysis explores the association of socio-economic variables and COVID-19-related indicators—including infection rates and mobility restrictions—with regional property prices. Our results indicate that high infection rates and containment policy measures are significantly associated with housing price dynamics, revealing both local associations within regions and indirect spatial spillovers to neighboring regions. We find that these variables, along with socio-economic covariates such as average age and childcare provision, are closely linked to spatial dynamics in property markets. Robustness checks across regional subgroups and different model specifications support these findings. The research contributes to the literature by quantifying the associations between socio-economic and pandemic-related factors and regional real estate price variations, as well as providing evidence of spatial spillover dynamics. The findings highlight the need for regionally tailored real estate policies to address the diverse relationships of these factors with property markets in Germany, while also offering a framework for analyzing similar dynamics in other countries.