Sustained price rises and growing sales volumes characterise the residential property market in Germany. Engel & Völkers has recorded market and price trends in 55 selected towns and cities in its comprehensive report. “Ongoing increases in house prices and rents can be observed both in major cities and university towns, as well as in many medium-sized towns and affluent boroughs across Germany,” said Kai Enders, Member of the Board of Engel & Völkers AG. Asking prices for freehold apartments rose by more than a third in 2017 in cities such as Leipzig, Mainz and Augsburg. Some places including Hanover and Kassel saw these prices increase by over half. The highest price rises for detached properties were registered in the city of Heidelberg.
Prices for waterfront apartments increase by over a third
For the first time, the Engel & Völkers report also included price trends for freehold apartments in prestigious waterfront locations. The sought-after combination of an urban and waterside setting comes at a price: Buyers interested in apartments close to the water in Berlin and Düsseldorf, for example, can expect to pay more than a third more. Overall, asking prices in the waterfront locations surveyed in the cities Hamburg, Berlin, Düsseldorf and Cologne were more than 15 percent higher than the respective local market prices.
New record sales for the German residential property market
Sale transactions totalling approx. 124.8 billion euros in 2017 marks a new record for the German residential property market (2016: approx. 119.3 billion euros). This latest report examining 55 towns and cities accounts for around a third of overall sales on Germany’s residential property market as a whole. The largest sales increases over the previous year were recorded in the eastern German cities of Erfurt, Chemnitz and Magdeburg. Here, the market volume rose by more than a third compared to 2016.
Real estate in German towns and cities remains attractive
Engel & Völkers anticipates that the current excess demand in many German towns and cities is set to continue. “Besides acquisition for private occupancy, residential property in Germany continues to be regarded as a very attractive form of capital investment and old-age provision. That is due to rising income levels and consistently low interest rates,” said Kai Enders, adding: “Real estate vacancy rates in the major cities are extremely low. Despite the high level of new construction, the demand for housing still cannot be met. At the same time, the favourable economic climate, comparatively low household debt levels, and restrictive lending standards are all factors that run contrary to the notion of a property bubble in Germany. In addition, property prices in German towns and cities remain moderate compared with Europe as a whole.”