In a survey published on Germany’s market for luxury residential property, Engel & Völkers has found striking differences in the range of sale prices registered in Germany’s major cities during the first half-year of 2015. Prices for detached and semi-detached houses sold in Hamburg ranged from 1.7 to 13 million euros. In Stuttgart, prices in this segment were between 1.4 and 2.8 million euros. The survey also investigated top prices per square metre for freehold apartments. Berlin emerged as the frontrunner here, with a price high per square metre of 19,020 euros. The scope of the survey was limited to the highest-priced five percent of property sales in Munich, Berlin, Frankfurt am Main, Hamburg, Stuttgart, Düsseldorf and Cologne. Data sourced from civic valuation committees served as the basis for the analysis.
“Sustained demand and ongoing growth define the market for luxury property in Germany’s most exclusive locations. In some cases, premium residences can sell for up to two or three times more than average house prices in any particular market,” said Kai Enders, Member of the Management Board of Engel & Völkers AG. The availability of luxury property is extremely limited. This end of the market is characterised in one respect by soft criteria such as superb locations, top-quality interior finishes, and outstanding views. Highly emotional, exclusive and in short supply, it is also influenced by hard factors including the sale price. Entry prices for luxury property vary significantly from city to city. For example, prices in Frankfurt start at 700,000 euros, whereas in Munich they begin at 2.1 million euros. It has long been widely accepted that a sale price of 750,000 euros denotes the lower threshold of the premium market segment. This definition no longer seems valid however, in light of these fluctuations in price depending on location, region and type of property.
Detached and semi-detached homes: highest average prices in Munich
The investigation reveals that price structures in individual cities differ greatly from one another. The differences are less pronounced in terms of average valuations.
Hamburg emerged as the city with the largest range in prices within the premium segment. For detached and semi-detached properties, prices started at 1.7 million euros and reached a maximum price of 13 million euros. The average sale price was 3.1 million euros. The majority of these transactions were made in the Elbe suburbs known as Blankenese and Othmarschen. With an average price of 4.5 million euros, buyers in Munich paid more than in any other city. Prices for the most expensive sales in the Bavarian capital ranged from 2.1 to 12.6 million euros. A third of these premium transactions were in the district of Bogenhausen, which accounted for almost half of the total transaction volume of 112.7 million euros. In Berlin, prices at the top end of the market were between 900,000 and 5.6 million euros. The average price in the German capital was 1.6 million euros. The most exclusive addresses for detached and semi-detached homes were located in the southwest of the city. Prices for real estate in Cologne in this market segment started at 1 million euros. The most expensive property sold for 6.3 million euros. The average sale price was 1.7 million euros. The highest-priced sales of detached and semi-detached homes took place in the Lindenthal district of the city. In Frankfurt am Main, prices ranged from 700,000 to 3.5 million euros, averaging at 1.5 million euros. The property that changed owners for the highest price was located in the Westend-Süd neighbourhood. Price brackets in cities such as Düsseldorf were significantly narrower – from 1.5 to 2.9 million euros. The average price was 2.1 million euros. Those detached and semi-detached homes commanding the highest prices were located primarily in the prestigious neighbourhoods to the left of the River Rhine. In Stuttgart, the entry price was 1.4 million euros, ranging up to 2.8 million euros. The average price was 1.9 million euros. Almost half of transaction revenues in this premium segment were made in the northwest neighbourhoods of Krähenwald and Mönchshalde.
Freehold apartments: Berlin and Hamburg are most expensive
In a city comparison, Berlin achieved the highest price per square metre at 19,020 euros in the district of Mitte. Many new real estate developments in recent years have seen Berlin catch up considerably in the premium market segment. In the district of Harvestehude in Hamburg, the highest-priced freehold apartment sold for 19,000 euros per square metre. By far the highest prices for high-end freehold apartments in this segment were at prime addresses on the Outer Alter Lake. The highest sale prices in Frankfurt am Main were for real estate close to the city centre. The highest price per square metre – at approx. 14,800 euros – was paid at a prime address in Westend. In Stuttgart, a top price of 12,600 euros per square metre was achieved at a direct inner-city location in Relenberg. High-end apartments in the newly developed Europaviertel quarter also achieved top prices. The highest price per square metre for freehold apartments at the top end of the market in Düsseldorf was 11,100 euros, for a new development in a central location. Meanwhile in Cologne, 9,800 euros per square metre was paid for the most expensive freehold apartment sold in the city.
Engel & Völkers forecasts continuation of dynamic markets
The survey of absolute premium sales revealed vastly different pricing structures in each of Germany’s major cities. “Over the course of this year, we expect demand for top properties to remain high and prices to rise. Market developments will also be helped along by intensified building activity in the premium segment and a lack of investment alternatives,” Kai Enders added.
You can download the detailed market research about the luxury residential property market in Germany here: