Anja M. Hahn
Vienna University of Economics and Business & DataScience Service GmbH
Sanela Omerovic
Vienna University of Economics and Business & DataScience Service GmbH
Sofie R. Waltl
University of Cambridge & Vienna University of Economics and Business
Abstract
We develop a framework to holistically test for and monitor the impact of different types of shocks affecting a country’s housing market, yet originating from housing-external sources. We classify events along three dimensions leading to testable predictions: supply versus demand, prices versus quantities, and immediate versus staggered. These dimensions translate into guidance about which data type, statistical measure and testing strategy should be used. To perform such tests, suitable statistical models are needed which we implement as a hierarchical hedonic model for prices and a count model for volumes. We apply this framework to the Austrian real estate market together with two disruptive events: the COVID-19 pandemic and the affordability crisis fuelled by stricter lending standards, increased living costs and higher mortgage interest rates. The results are largely consistent with expectations when following our proposed guidelines and selecting the suggested combination of data, models and testing strategy. By that, some housing market puzzles are resolved. Deviating from the a priori classification exercise means that some developments would have been undetected or wrongly interpreted. Further, adopting our framework consistently in the future would lead to better comparable research results and enable meta-conclusions from the bulk of studies available across time and space.
JEL Codes: R21; R31.
Keywords: Countrywide Housing Markets; Testing Framework; Supply and Demand Shocks; Immediate and Staggered Effects; Prices and Quantities; Hierarchical Hedonic Price Model; Count Model
This research benefits from funding by the OeNB Anniversary Fund, Research grant No. 18767 (LocHouse). This article uses data by Data Science Services GmbH. The views expressed are solely those of the authors and may not be shared by the data providers.
Dissemination
Working Paper: https://doi.org/10.48550/arXiv.2502.03012
Media Coverage: Wie die Corona-Pandemie Österreichs Immobilienmarkt beeinflusst hat (Die Presse, 8/May/2023, Austria)
Presentations: [1st Workshop on Residential Housing Markets: Perceptions and Measurement, Luxembourg][2022 NOeG Winter Workshop, Vienna][2nd Workshop on Residential Housing Markets – Connecting Housing Researchers in Austria][29th European Real Estate Society (ERES) Annual Conference at University College London][2023 NOeG Annual Meeting at the University of Salzburg][14th Geoffrey J.D. Hewings Regional Economics Workshop at WIFO in Vienna][(LIS)^2ER Workshop on Housing Policy and Wealth Inequality at LIS in Luxembourg][ESCoE Conference on Economic Measurement 2024 in Manchester][4th Workshop on Rent Control and Other Housing Policies in Turin][University of Aberdeen][University of Regensburg][3rd Workshop on Residential Housing Markets: A Market in Distress and Potential Solutions at WU, Vienna]
Sofie R Waltl 