German real estate market trends

Real estate market trends in Germany are booming in 2018. While the Brexit is making its first impact, Germany is brandishing itself as an economic model. The stability of Germany encourages and guarantees attractive and secure investments and upward trends for 2018. More than ever, the German real estate market is appealing to local and foreign investors.

German real estate market ever more popular

Economic security, advantageous taxation, low rental vacancy, cautious tenants, interesting added value, the German real estate market combines the good points and is highly valued by local and foreign investors. In 2017, more than 57 billion euros were invested in German stone, 2/3 of which in apartments; an increase of 25% than two years ago. This increase continues in 2018. To the traditional investors of French, English and American origin, are added now investors of Arab and Asian origin, the latter particularly take the housing “Neubau” (built after 1945).

A growing increase in real estate prices for 2018 (purchase and lease)
In 2018 and across the country, the average purchase price of apartments is € 3,065.43 / square meter, an increase of 7.9% compared to 2016. purchase is followed by the lower rent. In 2018, average rents are € 7.60 / square meter / month, with an increase of 4.3% compared to 2017.

Where to invest in 2018 in Germany?

In 2018, Germany still remains a country of tenants. For example, the OECD counted in 2017 a 55% ownership rate in Germany. This trend is evolving only very slowly. However, in some large cities, the ownership rate is much lower, and in Berlin, for example, it is 15%. This extremely low rate is explained by a long rental tradition, which also explains the attractiveness of Berlin in the eyes of rental investors.

On the other hand, Germany is a decentralized state, and large cities are spread over the whole territory. Of these, 7 major cities stand out: Berlin, Hamburg, Düsseldorf, Cologne, Frankfurt, Stuttgart and Munich. In the first half of 2017, Hamburg, Munich, Frankfurt, Stuttgart und Düsseldorf alone accounted for 60% of real estate transaction volumes.

The highest rents are in Frankfurt with 39.00 € / square meter in 2018, becoming the Fintech capital of Europe and already enjoying the first effects of the Brexit wave. It is closely followed by Munich with € 36.50 / square meter. The rents in Stuttgart and Cologne are around € 23.00 per square meter. In contrast, the average price of rent in Berlin is 12 € / square meter in 2018. While the big German cities have seen their rent for new contracts increased by an average of 2.2 to 2.5% between 2017 and 2018 (Hamburg, Düsseldorf, Berlin, Köln), the city of Stuttgart saw its increased by 3.7%.

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