Does Housing Vintage Matter? Exploring the Historic City Center of Amsterdam

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Does the vintage of a housing structure influence its price dynamics? Here we examine whether housing vintage introduces heterogeneity into the supply and demand relationship for housing. Older vintages are not easily reproducible leading to the value of an older vintage to potentially diverge from its replacement cost. To test our hypotheses, we employ a nonlinear model in a Bayesian structural time-series approach that explicitly disentangles structure and land values to identify vintage effects separately from physical deterioration and land values. We find significant differences in price dynamics between four distinct vintages of Amsterdam old city center apartments. Between 2000 — 2017, new construction had an average return of 1.7\%, with a standard deviation of 2.4\%. On the other hand, properties built in the 19$^{\text{th}}$ century had an average return of 2.2\% with a standard deviation of 2.8\%, during the same period.

SSRN working paper

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