Ruhr Economic Papers

Ruhr Economic Papers #784

Sorting in an Urban Housing Market – Is There a Response to Demographic Change?

by Uwe Neumann and Lisa Taruttis

RWI, 12/2018, 29 S./p., 8 Euro, ISBN 978-3-86788-912-4 DOI: 10.4419/86788912



In urban areas, there is considerable neighbourhood-level variation in population
characteristics. Using Dortmund as a case study we analyse whether and to what
extent rents, housing prices and segregation dynamics corresponded with demographic
ageing in urban neighbourhoods between 2007 and 2016. We find that in Dortmund
so far there has been no slump of the housing market in neighbourhoods where
the population ages more rapidly. Nevertheless, over the study period demographic
segregation was on the rise and, according to a hedonic analysis, prices for apartments
were higher in districts with a comparatively “younger” population. In the course of
further demographic change in Germany, which has come to a contemporary halt due
to immigration, the response to ageing on urban housing markets in terms of location
choice and prices may therefore become more evident. A large-scale urban regeneration
project has revitalised the housing market of a declining Dortmund community
during this decade. Since local ageing has not affected housing markets severely so far,
it appears to be within the scope of urban policy to upgrade the attractiveness of ageing
neighbourhoods as perceived by younger generations.

JEL-Classification: R21, R23, R31, R58,

Keywords: Neighbourhood sorting; demographic segregation; hedonic analysis; urban policy