The current real estate report of Landesbank Hessen-Thüringen focuses on the German housing market. We have summarized the most important information on price and demand developments here for you:
Prices have been rising for about seven years
The prices rise and rise. An end to the current uptrend is not in sight for the time being. Above all, the prices for new buildings rose more sharply compared to existing real estate. In the metropolitan areas of Germany in particular, prices are sometimes twice as high as the German average.
Are we already dealing with a real estate bubble?
Ever-increasing real estate prices have raised the question of whether we are already dealing with a real estate bubble? These concerns are mainly due to the development in many foreign housing markets before and during the financial crisis. For the most part, rising prices in Germany can be explained by the development of supply and demand. From a general overheating therefore can not be spoken.
If inflation continues to rise over the next few years, a correction could occur, which will then be reflected in slightly falling or stagnating prices.
Demand for residential property remains high
The reasons for continued high demand are on the one hand the strong internal migration to the dynamic growth centers of Germany and the continuing high level of immigration from outside. In the past year, the number of inhabitants in Berlin has risen by around 50,000 and in Hamburg by almost 25,000. The limited availability of building land in these major cities creates bottlenecks in the housing market. Thus, the purchase prices and rents rise sharply there.
Surroundings of the centers and smaller towns as an alternative
For whom the high prices in the big cities are no longer acceptable or simply no longer acceptable, deviates to the less expensive surrounding or smaller cities. For example, university towns with good transport infrastructure have already become more attractive.