Interest rates are low, demand is huge: real estate prices in major German cities continue to rise sharply. Only in one city has development stalled.
- AUGUST 09, 2021
The boom in the real estate market in German cities is not weakening. In the country as a whole, the price per square meter for existing condominiums increased by nine percent, to an average of 2,492 euros in the first half of 2021 compared to the second half of 2020. According to a study by the real estate portal Immoscout24, prices for newly built condominiums rose slightly less, by 7.9 percent.
The evaluation included advertisements from the five largest cities in Germany: Berlin, Hamburg, Munich, Cologne and Frankfurt am Main. House prices also increased significantly during the period under review. The asking price of an existing house in the first half of 2021 was on average 7.4 percent higher than in the second half of 2020. New homes in Germany were offered on average five percent more expensive than in the second half of 2020.
According to Immoscout24, demand for both types of apartments was stable - about five potential buyers contacted the advertised condominium from the portfolio each week, and one request per week concerned newly built condominiums. However, in the cities of large cities, these values were sometimes much higher. Secondary home sellers received four inquiries each week; for new buildings it was an average of one request.
However, when it comes to price dynamics, there are clear regional differences. The highest price increase was in Cologne, where prices for existing condominiums rose 6.6 percent to 4,078 euros per square meter. Demand was also highest in Cologne: ten potential buyers responded to each ad each week. In Berlin and Hamburg, the corresponding prices also rose by 4.8 percent. In Frankfurt am Main, prices rose by 4.5% and averaged 5,491 euros per square meter, making the main metropolis one of the most expensive real estate markets.
The real estate market in Munich, on the other hand, was in a state of stagnation. Prices for newly built condominiums rose 1.4 percent to an average of 8,673 euros per square meter. On the other hand, in the case of new buildings, despite high demand, there was a slight downward trend, with prices falling by 0.5 percent, to an average of 9016 euros per square meter.
"Munich's residential real estate market is showing an interesting phenomenon - despite high demand, prices are not rising," said Ralph Weitz, managing director of Immoscout24. "Thus, we can assume that the current price level is the pinnacle of what sellers can currently sell in the market."
Source: The mirror