Explaining the Spatial Variation in Homeownership Rates: Results for German Regions

L<sc>erbs</sc> O. W. and O<sc>berst</sc> C. A. Explaining the spatial variation in homeownership rates: results for German regions, <italic>Regional Studies</italic>. This paper employs cross-sectional data on ninety-six German regions to investigate the interregional variability of homeownership rates. Among the explanatory variables, the analysis includes important regional housing market indicators as well as regional socio-demographic composition, urbanization and labour market performance. An estimation strategy is chosen which accounts for different forms of spatial dependence between the regional units. It is found that regional differences in the relative price of owning versus renting and the affordability of owner-occupied housing play a key role in explaining why homeownership rates vary so substantially across the country. The results indicate significant neighbourhood effects for several variables.