Price Trend for Residential Property Remains Dynamic
According to the latest real estate analysis of the GEWOS Institute for Urban, Regional and Housing Research, it is now safe to expect new record levels on Germany's residential real estate market in 2016. According to the GEWOS figures, the increase in revenues is likely to be around nine percent. As far as the experts can see, demand for residential real estate in Germany remains strong, and so the dynamic price trend is here to stay.
The latest analysis is based on the data from roughly 917,000 changes of ownership in 2015. Taking into account the development of previous years and the latest market trends, the survey both diagnosed the development of the ongoing year and ventured a forecast for 2017.
For 2015, Gewos determined a property price growth by twelve percent. Revenues also increased at a double-digit rate (16 percent) to a year-end total of 213.9 billion euros. It was the first time that the annual result topped the mark of 200 billion euros. The bulk of it (around 71 percent) represented residential real estate. Revenues on Germany's residential property market have gone up by 53 percent, according to the survey. In the course of the ongoing year, the transaction volume generated by sales of detached homes, multi-family dwellings, condominiums and residential building land is expected to rise to c. 165 billion euros (out of a total market volume of c. 230 billion euros).
Condominium Market the Fastest-Growing Segment
According to GEWOS, the condominium segment is by far the fastest-growing one, with researchers expecting to see it expand at a rate of 14 percent in 2016. The survey also suggests that revenues generated by condominium sales have increased by around 88 percent since 2010.
Price hikes for detached and semi-detached homes, multi-family dwellings and residential building land are expected to be in the range of six to seven percent this year. The GEWOS analysis anticipates a continued price growth for residential real estate in 2017.
The main reasons the experts identified for this dynamic development include primarily the unchecked rise in demand for housing and the sustained low level of financing costs. Another key reason cited by the researchers is the stable macro-economic growth. That being said, revenue increases past, present and future are explained not least by the brisk trend in purchase prices.