Different preferences, but the same approach: the practice of the sales comparison in the Berlin housing rental and sale market

《Different preferences, but the same approach: the practice of the sales comparison in the Berlin housing rental and sale market》

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摘要: While determining the value of various housing attributes can vary between sales and rental markets, market participants may use the sales comparison approach as a common strategy. Due to the intransparent and illiquid nature of the housing market, the method provides a simple way for market participants in the two different markets to agree on prices. We show that a strong dependence tendency of market participants on market price information is commonly observed in both the sales and the rental market. Using spatial econometrics for 17,500 apartment rents and sales data respectively in Berlin, Germany, we find that the dependence tendency in the rental market is significant, and it is comparable with that in the sales market. In particular, the results are robust within the restricted market setting of increased regulation for rent. These findings are robust over various spatial specifications.