The COVID-19 pandemic has disrupted established urban patterns. The literature on the impact of the pandemic on the US housing market has shown a significant increase in the demand for suburban housing, resulting in a considerable increase in suburban prices compared to those in the city center (termed the “donut effect”). However, the German housing market did not experience such drastic changes. To examine price and rent adjustments during the pandemic, we analyze detailed housing data and find little evidence supporting the donut effect seen in the US. Apartment rents increase in suburban areas, while house prices do not change significantly. Examining the role of amenities, we find no explanation for price and rent differences between the central business district (CBD) and suburbs. The differences between the two markets may be attributed to cultural and structural distinctions. Our analysis, which includes data on population patterns and migration behavior, reveals that residents in Germany exhibit a slower-moving trend. Our findings remain robust across different settings and subsets of cities.
Keywords: house prices; rent gradient; COVID-19; donut effect; amenities
JEL Classification: R23; R31
Beze, Eyayaw and Thiel, Patrick, The Impact of COVID-19 on Real Estate Markets in Germany. Published in German Economic Review 2025(2) (Link).
The working paper version can be found in this repo Beze_Thiel_2023_The_impact_of_COVID-19_on_real_estate_markets_in_Germany.pdf, view it here. Also available at SSRN.
Please cite the paper for attribution.
BibTeX entry:
@article{beze_thiel_2025,
title = {The Impact of COVID-19 on Real Estate Markets in Germany},
url = {https://www.degruyter.com/document/doi/10.1515/ger-2024-0049/html},
DOI = {10.1515/ger-2024-0049},
journal = {German Economic Review},
publisher = {DeGruyter},
author = {Beze, Eyayaw and Thiel, Patrick},
year = {2025}
}