The market for luxury real estate continued to grow in 2018, as the Engel & Völkers Market Report 2019 on Germany’s Top 7 Cities shows. The Luxury Market Report marks developments and trends in the premium residential locations in Germany’s major urban centres. The analysis is focused on the most expensive five percent of residential houses and freehold apartments sold in the markets of Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf in 2018.
The high demand for luxury houses and their limited availability make this market particularly exclusive. Saturation of the market is still not to be expected any time soon due to a price trend in the premium segment. Top prices were also fetched for exceptional properties in 2018. In the Uhlenhorst district on Hamburg’s Alster Lake, a mansion changed owners for 17.2 million euros. This is closely followed by Munich: in the Bavarian state capital, a property was sold last year for around 15 million euros. Increasingly, these premium homes are only to be found in peaceful and exclusive locations. “Luxury properties are distinguished by an outstanding location, elegant construction and particularly high-quality amenities,” says Kai Enders, Member of the Board of Engel & Völkers AG.
The level of demand for freehold apartments in the luxury segment was high in all major cities. Both entry prices and the number of listings in the top segment rose for the most part. A clear upward trend can be seen in Berlin and Cologne in particular. At 38,600 euros per square metre, a freehold apartment in Hamburg’s landmark “Elbphilharmonie” achieved the highest sale price of the seven cities surveyed. This top price in 2018 marks a 36 percent increase over the previous year. Munich also registered top prices of up to 32,000 euros per square metre in the luxury apartment segment.
Germany’s capital has a rapidly growing luxury market. Average and entry-level prices in this segment have risen significantly in both segments. The Charlottenburg-Wilmersdorf district stands out in particular: 41 percent of sales were generated here in Berlin’s luxury segment for freehold apartments, and 55 percent in the market for houses.
Both segments achieved record prices in Hamburg in 2018. The top districts for the sale of luxury houses were the Elbe suburbs and Groß Flottbek, with a market share of around 50 percent. Luxury freehold apartments dominate in the districts around the Alster Lake. In the Harvestehude neighbourhood alone, the share of apartments sold on the premium market in 2018 is 18 percent.
The Bavarian state capital recorded the highest entry prices. Munich is the frontrunner both in the segment for luxury houses at 2.7 million euros and in the segment for freehold apartments at 11,800 euros per square metre. While buyers preferred to opt for houses in the Munich-Solln district in 2018, the highest number of luxury freehold apartment listings were in the Altbogenhausen area of the city.
The market for luxury property witnessed accelerated growth in Cologne. Entry and average prices rose significantly in both segments. The most popular districts for the acquisition of houses were Lindenthal and Rodenkirchen, accounting for over 90 percent of total sales. By contrast, more than 80 percent of revenues generated from the sale of luxury freehold apartments were for listings in the city centre and Lindenthal.
The city of “Vertical Living” is registering large market growth thanks to a large number of new construction projects. The “One Forty West”, for example, is a 40-storey development currently under construction in the Westend district with 187 exclusive rental and freehold apartments and is already gaining a reputation as a popular capital investment. The development is located in Frankfurt’s most sought-after district for luxury freehold apartments. Here alone, 83 properties were sold in 2018.
Very high demand in the luxury segment in Stuttgart is being met with low availability, which is only slowly being improved with the completion of new construction projects. Notable for the city is the fact that apartments in the luxury segment were sold in 17 of its 23 districts. By far the most expensive houses were sold in the Degerloch district.
Hardly any other city combines luxury and lifestyle as closely as the fashion metropolis Düsseldorf. The Heerdt district, and especially the Oberkassel neighbourhood, was in particularly high demand and saw the largest number of sales in 2018. At 68 percent for luxury houses and 41 percent for luxury apartments, the district on the left bank of the River Rhine accounted for the largest share of luxury property sales in 2018.
“Acquiring a luxury property will remain a solid investment, due to the high demand for exceptional properties in Germany’s major cities,” says Kai Enders. When furnishing these homes, particular emphasis is placed on natural materials, a sophisticated and understated ambience, and uncompromising high-end domestic technology. Buyers of freehold apartments tend to opt for high-quality finishes, sleek architectural lines and an exclusive location, as well as additional extras such as a concierge service.