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German real estate market – the latest data

For anyone interested in the German real estate market, Spring is a key time of year. A flood of major surveys, reports and market studies are released every year in February, March and April – with a raft of data, information and forecasts all related to the German real estate market. So, if you want to gain a better understanding of market developments in Germany, now is the time. Read on for some of the highlights.

 

 

German real estate market – Sparda-Bank study

 
The Sparda Banks are a group of twelve regional cooperative banks that serve almost 3.6 million members (i.e. customers) in Germany. The group has just published its “Housing in Germany 2017” study, which has been making headlines across Germany. Among the reports key findings are:

  • German homebuyers spent an average of EUR 242,000 buying a home in 2016.
  • On average, EUR 242,000 buys a 126-sqm home
  • In Munich, this would only buy a 44-sqm apartment. Munich is the most expensive city in Germany, and prices have risen by 81.4 percent since 2005.

The study analysed condominium sales data from Germany’s seven biggest cities and 63 towns and cities with populations of between 100,000 and 600,000, and combined this with sales data for detached, semi-detached and terraced homes in 292 administrative districts. The study also concluded that homebuyers benefit from long-term savings in comparison with renters:

  • Buying a home is, on average, 41 percent cheaper than renting.
  • The average German homebuyer takes out a 77.7 percent mortgage and needs 30 years to repay their loan in full.
  • A quarter Germany under 50 years of age plan to buy a home at some point.

German real estate market – Postbank study

 
Postbank is one of Germany’s leading financial services providers, with approximately 14 million private customers and 300,000 business customers. Every year, Postbank publishes a “Housing Atlas”, which analyses the relationship between residential property prices and incomes in 402 towns, cities and municipal districts in Germany. The major findings of the 2017 study are:

  • Income growth is falling further and further behind property price inflation.
  • Low interest rates and strong demand from would-be buyers continue to drive market developments.
  • Stuttgart registered the biggest gulf between wage growth and property prices. Between 2012 and 2016, real wages increased by 2.5 percent while residential property prices increased by 53.4 percent.

German real estate market – Mannheim Centre for European Economic Research (ZEW) survey

 
The ZEW’s March survey of 200 financial market experts found that an overwhelming majority agree that housing prices in Germany’s major cities are currently fundamentally overvalued. Roughly 90 percent said that a reduction in the price of residential property by 20 per cent or more within the next five years was “perfectly possible.”

The good news is that just one in ten of the surveyed financial market experts said that they expected this to have a large or very large impact on the financial health of the German banking system and private sector, whereas more than half said the impact would be limited or very limited.
Are there any recent studies that have particularly caught your eye? We’ve ignored the empirica Spring Report where because of the flak it has received, but maybe there’s another interesting study that we’ve missed. If so, please let us know in the comments section below.

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