New study provides an economic analysis of regional building land prices in Austria
Christian Reiner, lecturer and senior researcher at Lauder Business School, has published a new research paper in the peer-reviewed journal “Review of Regional Research”. The paper, co-authored together with Robert Musil from the Institute of Urban and Regional Research at the Austrian Academy of Sciences, contributes to the debates that have accompanied the global housing boom which started around the year 2000.
While these debates primarily focussed on the economic and social implications for urban housing markets, the current research analyses the repercussions for regional land prices of a national housing boom in and beyond agglomerations. Topics like convergence and divergence dynamics, regional price drivers, and spatial diffusion are investigated by examining the average building-land prices of 95 Austrian regions between 2000 and 2018.
The results indicate a clear increase in regional disparities in land prices, with the main rise taking place during a high price-growth period. Regions with high land prices are the main drivers of divergence, while a substantial number of peripheral regions with converging land prices were hardly affected by the national price boom. Land-price growth rates are positively affected by the number of households but negatively impacted by income growth, which points to a problematic decoupling of household income and land prices. Finally, the diffusion of the land-price boom occurs along the urban hierarchy as well as via neighboring regions, confirming the ripple-effect hypothesis.
For a full account of the results and findings, please click here.