Even in remote regions, real estate prices have risen by 40 percent. Visitors compete with locals for homes. Realtors describe the market as "absolutely insane."

  • MAY 24, 2021

The real estate boom has reached rural areas. The cost of homes in regions more than ninety minutes away from the nearest major city has risen by an average of 40 percent over the past four years. Even in areas from which you drive more than two hours to the next big city, prices have risen by more than 30 percent. This was the result of an ongoing analysis conducted by the Empirica Research Institute.

This is amazing. For many years, megacities were thought to grow and rise in price, while rural areas struggled with population outflows, empty homes and falling prices. But land is now scarce not only in the cities themselves, but also in the district. In the Berlin area, land prices have tripled since 2012, so more and more buyers are moving to remote villages and small towns. While a second-hand house in Frankfurt often costs more than one million euros, the same is offered for an average of 160,000 euros in the Vogelsbergkrais district and 220,000 euros in the Spessart district. "The province primarily attracts families who want to realize their dream of a house with a garden," says real estate economist Harald Simons.

Rural areas are being revived

This is also evidenced by the migration balance: while young people are still leaving the countryside, people between the ages of 30 and 50 flock there with their children. Even in remote regions, such as Prignitz in Brandenburg or Vulcanaifel in Rhineland-Palatinate, the population has recently been growing again. On the other hand, Berlin shrank last year for the first time in fifteen years. But the countryside is increasingly attracting more than just families. For several years now, there has been a tendency to purchase second homes outside tourist centers by the sea and in the mountains. In addition, rural areas are increasingly attracting citizens who want to live and work together on large facilities - projects that have so far mainly existed in the city.

Not only low prices attract to the countryside. The real estate boom is also fueled by low interest rates and the associated lack of attractive investment opportunities. In addition, open spaces and proximity to nature are attracting more and more people - a development that is gaining momentum again due to the pandemic, but which, experts say, could also be observed in advance. "In a digital world that is considered unsafe, many people are looking for certain processes, such as growing vegetables," said Martina Döhler-Behzadi, managing director of the Thuringia International Construction Exhibition, which aims to revitalize rural areas.

Conflicts are inevitable

The emerging interest in rural homes is not conflict-free. In particular, realtors describe the period since the beginning of the Corona crisis as "absolutely crazy." "Since March 2020, demand has surpassed anything we've ever seen here," said Sabina Schwimmann, Vulkaneifel's broker. "Even the most remote corners are in demand, the main thing is rail and the Internet," said broker Johannes Dietrich from the Black Forest.

Other colleagues report forty inquiries within an hour of unrepaired farms, tenders, and an increasingly aggressive mood if someone lacked the money. "Citizens compete with locals and are willing to pay higher prices," says Schwimmann.

Oliver Langner, who mediates in Holstein Switzerland north of Hamburg, reports a "very ambiguous picture": "Schleswig-Holsteins no longer buy here, it's too expensive for them." But buyers come from Hamburg, Cologne and even Munich and buy real estate at any price. "It's still cheap for them." Locals are not happy about this, because it not only leads to higher prices. The house, which is used as a second home, is also empty most of the year. High demand is in short supply. In anticipation of further price increases, sellers are still holding back.

Experts disagree on whether the new interest is a real turn in favor of rural areas. While real estate economist Simons is convinced, urban planner Döhler-Behzadi does not believe the situation will improve. "Nothing will change in the main trend of urbanization. Supplies in rural areas are declining, only slower. "

Source:  Frankfurter Allgemeine

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