The current situation on the real estate market in Schleswig-Holstein in 2024/2025

Prices stabilize, demand for housing remains high in Schleswig-Holstein's cities

In fact, a look at the past year 2024 shows that the market is slowly stabilizing and prices are falling less on average. In addition, demand for housing remains high, particularly in the larger cities in Schleswig-Holstein, such as Kiel, Lübeck and Flensburg.

In the state capital of Kiel, for example, the number of transactions has remained relatively stable with a forecast range of 345 to 380 detached and semi-detached houses and 735 to 800 condominiums in 2024. By way of comparison, the number of transactions in 2023 was 348 and 734 respectively. There has been a decline in the transaction volume: Average asking prices for single-family homes are 3.2% lower than in the first half of 2023 at €360,000.

Development of asking prices Kiel (€/m²):

The picture in Lübeck is similar: the Hanseatic city continues to represent a stable real estate and residential market. The forecast for 2024 points to a recovery in transaction figures and volumes, accompanied by moderately falling purchase prices for single-family homes (-7.6%) and condominiums (-1.3%). A look at the price change in a nationwide comparison shows that Lübeck is one of the cities that has already recorded a significant increase in asking prices compared to the previous year.

Development of asking prices Lübeck (€/m²):

The real estate market in Flensburg is showing a clear market shift. Transaction figures and volumes have been declining since 2021. A slight increase is forecast for the first time again in 2024. Despite this trend, asking prices for apartments and houses are stabilizing. At the same time, we are observing a sustained rise in rents, both for existing apartments and new builds. This development reflects the shift in demand on the rental market.

Development of asking prices Flensburg (€/m²):

Further information and figures can be found in the current Engel & Völkers Market Report Germany 2024/25 (available in German language only).

Construction activity continues to decline

The number of completed apartments remained stable in 2023 at 294,400, but falling building permits indicate a negative trend. In the first half of 2024, only 106,700 apartments were approved, 21.1% fewer than in the previous year, with single-family homes particularly affected (-30.9%). Despite government support measures, particularly in social and sustainable housing construction, a decline in completions is expected for the years 2024 to 2026. This will exacerbate the housing shortage in metropolitan regions, which has already led to rising rents and could also increase purchase prices in the medium term. On the positive side, construction costs and energy costs, which have risen sharply since the pandemic and the war in Ukraine, are expected to fall.

Real estate price trends in Germany

Property prices in Germany have risen continuously in recent years up to the end of 2022. While prices in high-quality locations are still stable, prices for condominiums in some locations have fallen slightly for the first time since the beginning of 2024. However, they remain at a high level and are already stabilizing again in some cases. Purchase prices for houses have remained stable at a high level since the start of the year.

It is clear that future market development will depend on many factors, in particular interest rate trends and, in the medium term, construction activity. In addition to location, energy efficiency is particularly important for the price development of individual properties. There could be greater market segmentation between properties in need of renovation and energy-efficient properties on the one hand and between growth regions and peripheral regions with weak growth on the other. Overall, economic development and financial policy will have a major influence on how quickly the market recovers.

Conclusion: Will it be worth buying or selling real estate in 2025?

The real estate market in Schleswig-Holstein is showing clear signs of recovery. After two years of decline, falling interest rates, an improved financing situation and a stabilized price level are providing new momentum. Demand for housing remains high, particularly in popular cities such as Kiel, Lübeck and Flensburg, which offers attractive opportunities for sellers in good locations and with energy-efficient properties. At the same time, the stabilization of the market also opens up opportunities for buyers to enter the market at low prices or to invest in properties that retain their value.

“The market is active again and is opening up many opportunities in this phase.”

- Till-Fabian Zalewski, CEO D-A-CH

This development offers both buyers and sellers the opportunity to benefit from the current market conditions. The key lies in recognizing the right time and making targeted use of the individual framework conditions - from location to energy efficiency. Schleswig-Holstein therefore remains an exciting market for real estate players, which can be expected to provide further impetus in the coming years.