The level of demand for holiday properties and second homes has been growing continuously for several years now in Germany. The market is developing very differently from region to region and in specific locations. In some cases, prices for residential property in popular holiday destinations have risen further. In the detached and semi-detached property segment, Sylt remains the most expensive location for holiday homes in Germany, with prices of up to 12 million euros. This is one of the findings published in the “Market Report on Holiday Homes in Germany 2014” by Engel & Völkers.
“In almost all holiday resorts we analysed, the level of demand for high-end holiday properties exceeds the level of available real estate. Top homes are set to remain a scarce commodity in future too, especially in the absolutely prime locations,” said Kai Enders, Member of the Board of Engel & Völkers AG. The rise in land transfer tax in the German states of Lower Saxony and Schleswig-Holstein as of 1 January 2014 has had little impact here. Prices are rising as a result in some places. On the island of Föhr, starting prices for detached and semi-detached properties in very good locations rose from 450,000 euros in 2013 to 550,000 euros in the first quarter of 2014.
In prime locations on the island of Rügen and in Timmendorfer Strand, prices for freehold apartments have continued to rise. As the number of holiday properties in good and very good locations on Tegernsee lake and in Garmisch-Partenkirchen is limited, average-quality locations are also attracting buyer interest and prices are increasing slightly as a result. Top prices per square metre for freehold apartments in very good locations ranged in the first quarter of 2014 from 5,500 euros on Chiemsee lake to 7,500 euros on the island of Usedom and as much as 13,000 euros on Sylt. Prices per square metre in top locations on the islands of Langeoog, Borkum and Amrum were moderate by comparison. For detached and semi-detached properties in very good locations on the island of Juist, prices ranged between 1.3 and 3 million euros. In the region of Fischland-Darss-Zingst, property prices in this segment were as much as 3.5 million euros. These figures are average prices reached, as estimated by Engel & Völkers shops, and do not reflect the absolute top prices reached.
Outlook: Stable to rising prices
For the remainder of the current year, Engel & Völkers is anticipating a stable to slightly rising price trend overall. The “Market Report on Holiday Homes in Germany 2014” shows that the development in specific locations within holiday regions remains very differentiated. On the East Frisian Islands, numerous new building developments are being realised at present, which are taking some pressure off the market in price terms. In Tegernsee on the other hand, a further increase in prices is expected in all segments and locations, particularly to lower price margins.