In large cities, apartments and houses are inaccessible for many people. The upward trend in property prices has also affected rural areas. A short-term trend reversal is not expected.
It doesn’t matter if in the city or in the countryside: home ownership in Germany tends to get more and more expensive. According to the Federal Statistical Office, buyers had to pay 11% more for apartments and houses in 2021 than a year earlier.
In the fourth quarter, residential property prices rose 12.2%, the fastest since 2000. Demand is high and supply is still scarce. Coupled with low building interest rates, this has been driving prices on the housing market for a long time. This trend has accelerated over the past year. From 2019 to 2020, apartments and houses became on average 7.8% more expensive.
That house ownership in cities like Berlin, Hamburg, Monk, Cologne, Frankfurt, Stuttgart or Düsseldorf are no longer affordable, word has spread. Now, the development towards more home offices during the pandemic has also increased the demand for living space in rural areas.
The pandemic drives prices up in the country
“The new real estate market records are helped by fears of a rise in interest rates and a rise in inflation. Many Germans are taking refuge in concrete gold and are increasingly placing cities in second place, after metropolises such as Monaco are already considered overvalued “Eva recently analyzed Grunwald, head of real estate at Postbank. “The corona pandemic only strengthened the desire for a home of their own and widened the range.”
As a result, in the last quarter of 2021, as announced by the Federal Office, the prices of single and semi-detached houses in sparsely populated rural districts increased particularly sharply: up 15.9 percent compared to the same quarter of the previous year. . Condominiums in these regions increased in price by 13.2 percent. In more densely populated rural areas, single and semi-detached house prices increased by 14.5 percent and apartment buildings by 11.2 percent.
More and more “overestimates”
According to Postbank’s calculations, Germany’s most expensive patch remains Munich. Nowhere else last year have buyers paid as much for a square meter of living space as in the Bavarian capital – an average of € 9,732 for an existing apartment. Therefore, 6,586 euros per square meter were due in Frankfurt, 6489 euros in Hamburg and 5528 euros in Berlin. According to data from Postbank, the most expensive district in Germany with prices per square meter of € 7977 in 2021 was the district of Nordfriesland, which includes the North Sea islands of Sylt, Föhr and Amrum and coastal holiday resorts such as St. Peter- Ordination. Otherwise, the list of the ten most expensive districts includes only the districts of the commuter belt around Munich and the resort areas at the foot of the Alps.
The Bundesbank has been warning of overvaluation of the real estate market for years. Price increases in Germany and other European countries have also recently alarmed the ESRB of the EU Risk Council. “Residential property overvaluations have risen,” the Bundesbank said in its February monthly report. “According to the latest estimates, real estate prices in cities in 2021 were between 15% and 40% above the price indicated by socio-demographic and economic fundamentals.” In 2020, the range was still 15 to 30 percent.
Skills shortages slow new construction
In December, the German Institute for Economic Research concluded, based on an analysis of data from 114 major cities, that “speculative exaggerations are becoming more and more common, especially with condominiums and building plots in metropolises such as Berlin, Hamburg. and Monaco “. “There, but also in other large cities, price corrections on a larger scale are possible in the coming years.”
The federal government also wants to ensure more affordable housing. “We have set ourselves the goal of setting the course so that 400,000 apartments can be built each year, 100,000 of which are affordable and publicly funded social housing,” Construction Minister Klara Geywitz said last week. to the Bundestag.
But there are doubts that these plans can be implemented: many artisans and construction companies are working at full capacity due to the high demand for real estate. Furthermore, building materials such as wood, steel and insulation materials have become extremely expensive in recent months as demand on world markets has increased amid the economic recovery after the 2020 Corona crisis and delivery capacities are limited. This also drives up construction and purchase prices.
Experts give builders and property buyers little hope of short-term relaxation. The Central Association of the German Construction Industry (ZDB) expects construction prices in Germany to rise again this year. In 2021, they had increased by six percent. “This was the strongest increase in over 20 years,” said ZDB CEO Felix Pakleppa. For 2022, the association expects growth of four percent. “This means that things are calming down a bit, but prices are still rising.” A level like before the pandemic is not predictable – “and this is mainly due to the sharp rise in material prices,” Pakleppa said in February.
© dpa-infocom, dpa: 220328-99-698578 / 4 (Of Jorn Benderdpa)