Secondary housing supply

Arbeitspapier

I estimate the impact of new housing supply on the local rent distribution, exploiting delays in housing completions caused by weather shocks during the construction phase. Increasing the flow of new supply by 1 percent lowers average rents by 0.2 percent, and increases disproportionately the number of second-hand units offered for rent. The impact of the supply shock is similarly strong in locations experiencing growing housing demand. Moreover, it affects the entire rent distribution. Employing a quantitative model, I explain this pattern by secondary supply: New supply triggers a cascade of moves that frees up units in all segments of the local market.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IAB-Discussion Paper ; No. 6/2023

Classification and Topics

• Classification: Wirtschaft ; Intertemporal Household Choice; Life Cycle Models and Saving ; Market Structure, Pricing, and Design: General ; Urban, Rural, Regional, Real Estate, and Transportation Economics: Housing Demand ; Housing Supply and Markets
• Subject: housing supply ; rental housing ; rent distribution ; secondary markets ; market integration

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Mense, Andreas
• Event: Veröffentlichung
• (who): Institut für Arbeitsmarkt- und Berufsforschung (IAB)
• (where): Nürnberg
• (when): 2023

Further information

• DOI: doi:10.48720/IAB.DP.2306
• Handle: http://hdl.handle.net/10419/274565
• Last update: 10.03.2025, 11:44 AM CET