Rapid Rise in Condo Prices Continued in 2019
As in prior years, the selling prices for condominiums in Germany continued to soar in 2019, growing at an average rate of 9.3 percent (inflation-adjusted). The price dynamics actually accelerated year on year, as the latest “housing atlas” (“Wohnatlas”) shows, which Postbank compiled together with the HWWI Hamburg Institute of International Economics. What is more, the price growth was not concentrated in a few major cities but widespread – as nine out of ten districts and independent cities registered an increase in selling prices, according to the survey.1
It shows that prices in Frankfurt am Main and Berlin, for instance, have climbed at an above-average rate of eleven and just over ten percent, respectively. Especially Berlin is quickly catching up and has advanced to rank four among the “Big Seven” metropolises with a price tag of now 4,639 euros per square metre. Ahead of Berlin are Munich, which crossed the mark of 8,000 euros for the first time (8,079 euros), Frankfurt (5,687 euros) and Hamburg (5,054 euros).
Berlin Brandenburg Metro Region Prospers
Another survey finding is that the trend of steep price hikes in the metropolitan suburbs has persisted. Interesting to see is that three of the five districts with the fastest price growth are located in the state of Brandenburg. Dwelling prices went up by 48 percent in the Uckermark region, by 42 percent in the Elbe-Elster district in southern Brandenburg near Leipzig and Dresden, and by 34 percent in Frankfurt (Oder). The Berlin-Brandenburg metro regions is growing at an extraordinary pace, and Saxony’s two largest cities, Leipzig and Dresden, appear to have a similar price-driving effect in their suburbs.
But the most expensive cities and districts are still the usual suspects in southern Germany, most notably in Bavaria. In addition to Munich, they include the districts of Miesbach, Starnberg and Fürstenfeldbruck, all of which lie in the greater area of the Bavarian state capital.
Trends of Prior Years to Continue
Reasons that Postbank cites for the generally brisk price growth include the low level of interest rates as well as keen demand, paired with the persistent supply shortage. In other words, there have been no fundamental changes in the development of the German housing market in recent years. Instead, it continued to follow the trends of previous years. According to Postbank, it is still too early to say whether or not the coronavirus crisis will cause a shift in trend in 2020.