The communist regime in the German Democratic Republic (GDR) curtailed property rights in the urban land market through expropriation, forced administration, rationing, and restrained marketability. After the fall of the Berlin Wall in 1989, well-defined property rights had to be reestablished to restore competitive urban land markets under German laws. We examine the revival process from 1990-2008 for East Berlin, the capital of the former GDR. West Berlin, which always had a market-based land market, is used as comparator. We find that the revival of the East Berlin land market and substantial investment support resulted in a swift convergence in the composition of the housing stock and in the pricing behavior in both parts of Berlin.
- property rights
- urban land market