▷ Postbank Housing Atlas 2020: Long-term upward trend in the real estate market / …

15.09.2020 – 10:00

Postbank

Bonn (ots)

Rising prices for residential property can also be expected in the future. The corona crisis shouldn’t change that much. This is the opinion of experts from the Hamburg Institute of International Economics (HWWI), who annually prepare a purchase price forecast for the Postbank Housing Atlas. Although the calculations are based on data that were collected before the corona pandemic, the forecast is likely to be largely stable. In more than half of the 401 German districts and cities, apartment owners can therefore expect their property to increase in real value by at least 2030. The analysis of the HWWI sees one reason for the continued high demand primarily in the attraction of the metropolises: The number of inhabitants in and around the urban centers is likely to continue to rise.

Munich remains the front runner

For Munich, the experts forecast an annual increase in purchase prices of 1.70 percent in real terms. Property buyers had to invest an average of 8,079 euros per square meter in the Bavarian capital as early as 2019. According to the calculations, high rates of increase are also to be expected in Düsseldorf and Cologne: In North Rhine-Westphalia’s state capital, the forecast increase is 1.21 percent per year. In the cathedral city, home ownership is likely to be 1.06 percent more expensive per year. For Berlin, the expected price increases are 1.0 percent annually and thus significantly higher than forecast in the Housing Atlas 2019, which showed an annual increase of 0.76 percent. In Frankfurt am Main, prices will rise by 0.8 percent annually until 2030. This is the weakest increase among the so-called “Big Seven”, the largest German metropolises.

Forecast: Price development in the “Big Seven” of German cities 2019-2030

Real price growth per year in percent

Rang   Stadt            Preistrend in %   Preis pro Qm 2019 
1      München          1,70              8.078,77 
2      Düsseldorf       1,21              4.118,32 
3      Köln             1,06              3.967,09 
4      Berlin           1,00              4.638,89 
5      Hamburg          0,95              5.054,23 
6      Stuttgart        0,91              4.589,24 
7      Frankfurt a.M    0,80              5.686,62 

Existing apartments

Sources: BBSR (2015, 2020), Value AG market database (2020); Genesis regional (2020), MB research (2019) Federal Statistical Office (2018), calculations HWWI

Purchase price forecast based on the HWWI housing market model

The purchase price forecasts for the 401 independent cities and districts are based on assumptions about the future development of supply and demand, with various regional data on the population and age structure, household size, income development, housing expenditure and housing supply being incorporated. The HWWI housing market model shows how these factors influence one another. At the end of the model calculation, there is the purchase price forecast for the period 2019-2030.

Although the consequences of the corona pandemic have not yet been factored in, the experts do not expect any major shocks on the housing market. “We see no signs of a bubble that could burst as a result of the crisis. On the contrary: From our point of view, the real estate market is still an anchor of stability,” says Eva Grunwald, Head of Postbank Real Estate. According to the HWWI, the local income development plays the decisive role for the regional real estate markets. At the moment, major losses are being cushioned by short-time work benefits. However, if the economic consequences of the Corona crisis lead to significant regional income losses for large parts of the population, this could dampen demand for residential property. A second shutdown cannot rule out significant effects on the housing market. “However, especially in difficult times, having one’s own four walls means security and independence. This has also been confirmed in past crises, in which real estate has proven to be a safe haven,” says Grunwald.

Forecast: Top ten price development in the 2019-2030 regions

Real price growth per year in percent in German districts and cities

Rang   Stadt/Kreis            Bundesland       Preistrend in %     Preis pro Qm 2019 
1.     Erding                 Bayern            2,27                4.472,57 
2.     Landsberg am Lech      Bayern            2,06                4.014,60 
3.     München (Landkreis)    Bayern            2,01                6.043,45 
4.     Cloppenburg            Niedersachsen     2,00                2.141,51 
5.     Ebersberg              Bayern            1,96                5.151,73 
6.     Pfaffenhofen a.d. Ilm  Bayern            1,82                3.784,32 
7.     Heilbronn, Stadt       Baden-Wüttemberg  1,80                3.066,03 
8.     Potsdam, Stadt         Brandenburg       1,74                3.837,22 
9.     München                Bayern            1,70                8.078,77 
10.    Rosenheim              Bayern            1,70                4.283,40 

Existing apartments

Sources: BBSR (2015, 2020), Value AG market database (2020); Genesis regional (2020), MB research (2019) Federal Statistical Office (2018), calculations HWWI

Strongest price increases expected in Bavaria

Prices are likely to rise the most in some Bavarian districts in the next ten years. Seven out of ten districts and independent cities with the strongest growth rates are in the Free State of Bavaria. Among them are, in addition to Germany’s most expensive city, Munich, some districts in the suburb of the Isar metropolis. Outside of Bavaria, the district of Cloppenburg shows strong annual growth rates of plus two percent. The city with the strongest annual price increase is Heilbronn in Baden-Württemberg, according to the HWWI forecast. The price trend is 1.8 percent. The experts in Potsdam expect slightly lower price increases. For Brandenburg’s state capital, the calculations result in an annual increase of 1.74 percent until 2030.

The boom is thus continuing in the regions that are already particularly popular: Erding, the district of Munich and Ebersberg are among the most expensive districts in Germany. The square meter prices there were already above 4,000 euros in 2019 and are therefore rather high in a nationwide comparison.

Upward trend away from the Big Seven too

In addition to the Big Seven, other cities are also the scene of the real estate boom, as the residential atlas shows. In addition to the major cities of Heilbronn, Potsdam, Leipzig, Freiburg im Breisgau, Münster, Dresden, Ingolstadt and Mainz, the two independent Bavarian medium-sized towns of Landshut and Memmingen are forecasted annual growth rates of more than one percent by 2030. “The high prices in the Big Seven have a deterrent effect on many prospective buyers. Smaller centers are increasingly being considered and are becoming more attractive,” says real estate expert Eva Grunwald.

Homeownership despite the negative price trend?

In the eastern German federal states, the forecast population decline is weakening the demand for real estate. The Postbank Residential Atlas shows that the price trend is negative in most districts and cities. Exceptions that develop against this trend are the greater Berlin area and the centers of Leipzig, Dresden, Jena and Weimar. Losses in value are also evident in some regions in southern Lower Saxony and northern Hesse as well as in the Ruhr area. If you would like to move into your own four walls here, you don’t necessarily have to do without it. “When making a purchase decision, it should not be overlooked that living in one’s own home – even in old age – is very valuable,” says Grunwald. “After all, buying real estate is not just about the return, but also about the quality of life in your own home. If you are unsure, you should get support: a real estate expert can competently assess the investment.”

Background information on the Postbank Residential Atlas 2020

The Postbank Housing Atlas is an annual, multi-part series of studies that illuminates the German real estate market from various aspects regionally down to district level. Under the direction of graduate economist Dörte Nitt-Drießelmann, Senior Researcher at the Hamburg World Economic Institute (HWWI), the development of real estate prices in the 401 German districts and independent cities was examined.

Press contact:

Postbank
Ralf Palm
+49 228 920 12109
ralf.palm@postbank.de

Original content by: Postbank, transmitted by news aktuell

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