Transaction volume for apartments in 2018: Surrounding areas profit from urban boom
At 6.05 billion euros, the German capital Berlin defended its top position from the previous year in the ranking for the transaction volume of freehold apartments. It is followed by Munich at 4.76 billion euros and Hamburg at 2.73 billion euros. Together with Frankfurt, Cologne, Stuttgart and Düsseldorf, these seven cities account for more than a quarter of the total turnover generated on Germany’s market for freehold apartments.
The good infrastructure, combined with a diverse range of opportunities in terms of work, education and leisure, make these major cities desirable residential locations with a high quality of life to offer. “However, due to the limited availability of properties and high apartment prices in the Top 7 cities, prospective buyers are increasingly turning their attention to smaller towns and nearby regions in the greater metropolitan areas,” says Daniela Löchner.
Cities such as Potsdam, Ingolstadt and Halle saw an increase in transaction volume of more than 30 percent compared to the previous year. Starnberg, close to Munich, achieved the highest growth in transaction volume in Germany, with a 64 percent increase in the number of sales recorded.
Outlook: Home ownership ratio holds potential for development
Looking at the home ownership ratio in Germany (47.5 percent), there is still considerable upward potential compared to other countries (average residential ownership ratio in Europe: approx. 70 percent). In particular, good and average locations outside of the main metropolitan regions offer attractive investment opportunities, as the growth in prices here has not yet been exhausted. “For the general population, acquiring residential property is a key factor when it comes to asset accumulation and retirement provision. The positive situation on the employment market and the current low rate of interest are creating ideal conditions for financing properties. Now is therefore the ideal time to buy real estate,” Kai Enders recommends.
This is the seventh time that Engel & Völkers has published its “Market Report for Residential Property in Germany”. It also contains in-depth analysis on current issues including new construction activity and liveable cities, in addition to a comparison of costs involved in buying or renting. It is now available for the first time as an interactive website (in German):