German Housing Prices

GiNN-BerlinKontor.—The catastrophe in Fukushima in March 2011 caused the German government to either shut down German nuclear power plants or to schedule them to be shut down before they reach the end of their life spans, which, in turn, by May of 2012, caused prices for housing located within five kilometers of a German nuclear power plant to fall by eleven percent (relative to other housing) if the plant had been shut down, or by five percent if the plant was still in operation. Prices for housing near nuclear power plants that were not in operation at the time of the catastrophe in Fukushima were not affected. These are the findings of a new study conducted by the RWI and the Kiel Institute for the World Economy (IfW).

To study the effects of the power plant closures or scheduled closures on housing prices, the prices for 900,000 detached houses that were listed on the German real estate website Immobilien-Scout 24 between March 2009 and May 2012 were analyzed, whereby the month in which the Fukushima catastrophe occurred (March 2011) was not included.

There seem to be two reasons for the fall in housing prices. One of these is that the power plant closures cause a rise in unemployment in surrounding areas, whereby businesses in these areas suffer and the towns in these areas, in turn, take in less tax revenue. As a result, people are less inclined to buy houses in these economically depressed areas. The other reason is that the Fukushima catastrophe has caused people to be more critical of the dangers posed by nuclear power plants. People consider the areas near such plants too dangerous to live in, and the housing prices drop accordingly. Of these two reasons, the first seems to be the most important, as prices fell the most in areas near plants that had been shut down and thus no longer posed any immediate danger.

Seven of the 17 German nuclear power plants were shut down temporarily within three days of the Fukushima catastrophe, and in June 2011 the German government decided to shut them down permanently, together with a plant in Krümmel that had not been producing power since 2009. Further, they decided to shut down the remaining nine plants before they reach the end of their life spans. The last of these plants is to be shut down in 2022. (Source: iwf-kiel.de)

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