COVID-19 as a spatial shock: Uneven land market dynamics in metropolitan areas

The COVID-19 pandemic reshaped the spatial dynamics of metropolitan land markets in the Czech Republic. Using a large dataset of land transactions and a Bayesian Vector Autoregression with exogenous variables (BVARX), we show that the pandemic reinforced suburbanization patterns, primarily driven by demand shocks, while broader macroeconomic factors played only a complementary role. These effects were not uniform across cities. Large metropolitan areas experienced strong and persistent suburbanization pressures, whereas mid-sized cities exhibited more muted responses, reflecting differences in regional integration and economic centrality. These shifts persisted beyond the pandemic period, indicating a lasting transformation in spatial land market dynamics. Overall, our findings highlight that city-specific structural characteristics critically shape the transmission of demand shocks and underscore the need for coordinated metropolitan planning to address pressures on land use, housing affordability, and infrastructure capacity.