Homeownership Report: Growth in Prices and Sales Figures
The values of condominiums and homes have kept on rising in 2019, too. The year seamlessly continued the trend of previous years, as the ACCENTRO Homeownership Report 2020 just confirmed. Prices rose by a national average of 6.35 percent in 2019. The increase thus matches almost exactly the growth rate of the year before, when prices went up 6.82 percent nationwide.
The majority of the 82 largest German cities, whose market action IW German Economic Institute in Cologne analysed for the purpose of the Residential Market Report, therefore registered an increase in revenues as well. The city with the single-biggest revenue total due to its size is the German capital Berlin with c. 6.25 billion euros, followed by Munich with 5.55 billion euros. But close behind the seven largest metropolises in ranks eight and nine were Leipzig (846 million euros) and Dresden (840 million euros), demonstrating just how strong some of the cities in the eastern German states have become lately.
Number of Sales Is Going Back Up
Remarkable to note moreover is that not just revenues went up but the number of transactions, too. Following in the wake of a 2.51-percent decline as recently as 2018, condominium sales perked up again in 56 out of 82 cities year on year. This means that the price growth is not attributable to a shortage in available flats. Rather, the increase in sales by 4.05 percent across Germany illustrates how attractive many people find homeownership.
The biggest increases in sales were registered in Heidelberg and Regensburg where the number of condominium sales were up by roughly one third each at 39.8 percent and 31.5 percent, respectively. The first of the so-called Big 7 cities in this ranking is Stuttgart (7.0 percent) in place 37, which is explained by the fact that these metropolises are already so densely developed that new-build construction cannot keep up with strong demand. The consequences of this situation are particularly conspicuous in Hamburg and Berlin where the number of sales already declined at rates of -2.25 percent and -1.96 percent, respectively.
Market Level in Berlin Remains Stable despite Regulatory Measures
As far as revenues per sale go, Munich crossed the magic barrier of half a million euros per sale in 2019 for the first time. Condominium buyers paid an average of 535,043 euros in the Bavarian state capital, which thereby renewed its undisputed title as the city with the highest property values in Germany. Berlin’s housing market also delivered an extremely robust performance in 2019: Despite the political uncertainties and the consequences of the rent cap introduced in March, the average revenue per sale rose from 321,578 euros to 337,577 euros.
However, the steepest pro-rata increases in revenue per sale were reported from B- and C-class cities. Particularly dynamic was the market in North Rhine-Westphalia: Six of the ten top-scoring cities—Dortmund, Remscheid, Herne, Solingen, Witten and Münster—are located in this, the most populous German state. The result in Dortmund is particularly impressive with an increase by 38.5 percent between 2018 and 2019. But it was certainly not the only city of its class to excel in this category: No less than 32 other municipalities reported double-digit percentage growth.
Compare the top 10 cities in Germany in various rankings at: www.accentro.ag/publikationen/wohneigentumsreport/ and order the complete report on the development of the 82 major cities with extensive evaluations on over 200 pages.