Qizhou Xiong (Oxford University): "Housing Yield"

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.