Real estate portal Immowelt Germany, which presented a detailed analysis of the trends characterizing the housing market not long ago, recently stated that the German property market is coming back to life. Price growth is leveling, with Cologne and Munich headlining the price growth rankings.
Since the beginning of the year, specialists from Immowelt have examined the average asked prices of homes in 77 of Germany’s largest cities. Results showed that the average had risen in 39 cities and fell in 37. Cologne has boasted the largest price enhancement since January going up to 7/11. 9%. There were other cities which observed an increase in the apartment prices, which included:
- Hanover where the prices went up by 7. 2%,
- Munich, and Frankfurt with an additional 4. 9% increase in prices.
On the other hand, price declines were experienced in university town Göttingen (5.3%), Saarbrücken (3.7%), Wolfsburg and Chemnitz (2.9%) since beginning of this year. The overall rank of European cities remained unchanged but Berlin slightly dropped by 0.9%.
As Pete Derricks, Managing Director of Immowelt, stated in his message: ‘’It is worth noticing that market gained its job in the last six months, as the price tag, initiated by a squeezing up of interest rates, is accessible in comparison with a previous period, moreover, nowadays interest rates are not as high as six months ago”.
The latest months has seen a lot of contrasting data regarding the state of German property market. At the end of the first quarter of this year, average real estate prices in Germany went down by 6% (or 3.7%, considering inflation). As a result, German developers and major investors tend to be pessimistic, avoid any major movements and not expecting the potential quick revival of the market. The number of building permits that were issued in the country had reduced by 24% down in May (by the yearly calculation).
On the other hand, these developments tend to influence the shortage of supply in the German real estate market, which, in turn, is causing the trend towards stabilization. In addition, rising rental rates make investment deals more attractive, and realtors continue to signal that sellers are willing to lower prices.
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