S.Rising rents, rising purchase prices: for years, the big cities have been the problem children of real estate economists and building policymakers. The new building offensives that are repeatedly called out are intended to alleviate the pressure on the urban housing markets. But some city dwellers obviously don’t want to wait for it. In the spring report of the real estate industry published on Tuesday, there is talk of a trend reversal.
Between 2012 and 2016, the purchase prices for one- to two-family houses in the metropolises rose by an average of 37 percent, whereas in regions with a journey time of 60 to 70 minutes to the nearest city center, it only rose by 9.5 percent. However, this pattern has changed in recent years. The rates of increase have “adjusted towards the top”, says the report, “the attractiveness of remote areas has increased relative to the more central locations”.
“The typical single-family house is in the village”
Above all, people over the age of 30 and under 18 are drawn to the country, i.e. families. Numerous counties would see increasing numbers of residents. By contrast, there were population declines up to September 2020 in cities such as Stuttgart and Berlin with 4200 and 6200 fewer inhabitants, respectively. One of the reasons are fewer newcomers from abroad, which is attributed to the travel restrictions in the wake of the corona pandemic.
For Harald Simons, CEO of the analysis company Empirica, it is clear why the Germans are new to the country: “Of course, this is the single-family house that is moving here.” Even after the Corona crisis, those who only go to the office once or twice a week have to take longer travel times into account. And fashion brands or groceries that are loved in the city can also be sent to you.
“It doesn’t matter to online retail whether it delivers to Berlin-Kreuzberg or the Uckermark.” He is in turn critical of the fact that politicians, especially the Greens, are critical of single-family homes. “The typical single-family house is in the village.” This “normal life” in the country should not be put under general suspicion.
There is still a west-east divide
In the meantime, new contract rents in the big cities are no longer growing quite as strongly as in previous years; However, there can still be no talk of a standstill. In the seven largest cities (Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich, Stuttgart) interested parties now have to pay more than 10 euros cold rent per square meter.
The nationwide average is 7.57 euros, which corresponds to an increase of 3.3 percent compared to the previous year. There is still a west-east divide: in west German cities the average is 8.84 euros, in east German cities 6.87 euros. “Residential properties are completely corona-resistant,” stated Andreas Mattner, President of the Central Real Estate Committee (ZIA).
There was also no breathing space when it came to buying prices for condominiums. Existing apartments rose in price on a nationwide average by 8.6 percent to around 2280 euros per square meter. It is interesting that, unlike in rents, it was not the western German cities that recorded the highest increases, but the rural districts – another indication of the urge to go outside. The price level is still highest in the western German cities with an average of 2900 euros per square meter.
As far as new construction activities in Germany are concerned, the report paints a different picture than recently Federal Building Minister Horst Seehofer (CSU). According to the report, around 300,000 new apartments are likely to have been completed in 2020, and economists are expecting 310,000 for 2021. That is still a long way from the politically desired 375,000 per year, as stated in the coalition agreement between the CDU / CSU and the SPD. The real estate economists date the previous peak value to the year 2001 with 326,200 completed apartments.
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