Stefano Colonnello (Ca’ Foscari University Venice)
10 June 2020 @ 15:00
Short Bio: Stefano Colonnello graduated at the École Polytechnique Fédérale de Lausanne and the Swiss Finance
Institute in 2015. Prior to joining Ca’Foscari University Venice as Senior Assistant, he was Assistant Professor at the Otto-von-Guericke University Magdeburg and at the Halle Institute for Economic Research. Most of his work focuses on empirical investigations in banking, corporate finance, and law & finance.
Abstract: This paper investigates cross-sectional heterogeneity in residential property prices using rental and sale listings from a large German internet real estate. By matching properties for sale and for rent, we develop a novel price-to-rent ratio measure at the micro-level, with which we examine the determinants of regional variation in the first two moments of the ratio. The ratio strongly co-moves with local demographics, housing supply rigidities, and housing market liquidity. Correlation patterns are broadly in line with a Gordon framework, where differences in the price-to-rent ratio stem from heterogenous expected discount and rent growth rates. However, there remains a puzzling level of idiosyncratic heterogeneity that is inconsistent with existing theories.