Alexander Huber
Vienna University of Economics and Business
Daniel Schäfer
Johannes Kepler University Linz
Sofie R. Waltl
University of Cambridge
Abstract
On July 1, 2023, Austria introduced the “Bestellerprinzip” (ordering principle), which requires those hiring a real estate agent to cover the fee. Previously, landlords commonly hired agents, but tenants paid the cost. We assess implications for Austria’s by far largest rental market – Vienna – relying on a pan-platform collection of rent advertisements and supplemental data from the quarterly conducted micro-census and further administrative records. The regulatory change led to significantly fewer listings driven by a decrease in the use of agents. Furthermore, we detect higher rents across all market segments – whether rent-controlled or not, and whether agent-listed or direct. This suggests landlords may have been profiting even beyond cost recovery, while new renters and agents lost. Hence, the policy objectives articulated by parliament were not realized during the initial post-intervention phase. Rent controls in place in Vienna also appears to have been widely ignored upon advertising, highlighting the need for stronger enforcement if it is decided that current regulations are to remain in place and effective.
Keywords: Rental Market; Ordering Principle; Statutory Incidence; Agents; Volume Effects; Price Effects, Free Riders; Rent Control; Austria
JEL codes: D04, H22, R31, R38
Presentations (incl. scheduled):
[1st Housing Policy Symposium, WU Vienna][4th Workshop on Residential Housing: Balancing Sustainability and Affordability in the Building Sector, University of Zurich]
Sofie R Waltl 