In many German cities, prices for new apartments have exploded in recent years. Even in the crisis year 2020, no trend reversal can be seen.
Within a year, prices in the largest cities rose by up to 21 percent. This is the result of a current analysis by immowelt for the 14 cities in Germany with more than 500,000 inhabitants. The offer prices for existing buildings (built between 1945 and 2015) and new buildings (built in 2016 or later) in 2019 and 2020 for an example apartment with 80 square meters and 3 rooms on the 2nd floor were examined.
Accordingly, the purchase prices in Germany’s most expensive city of Munich climbed even further: After a plus of 10 percent, the square meter currently costs 9,970 euros. Means: For a newly built 80 square meter apartment with 3 rooms, almost 800,000 euros are due. In addition, there are the additional purchase costs. For many families, these prices may no longer be affordable. If they still want to move into a new building, there is often only the way out of the city.
Many families in the other German cities with over a million inhabitants are likely to feel the same way, even though the price level is significantly lower. In Hamburg, the square meter for a new apartment currently costs 5,860 euros – that is 7 percent more than in 2019. Berlin (+8 percent) and Cologne (+9 percent) showed a similar price development last year. In terms of square meter prices, Berlin is just above the 5,000 euro mark, Cologne just below it. A 3-room apartment (80 square meters) there costs around 400,000 euros and thus half the price of Munich.
One reason for the high new building prices is the steep rise in property prices for years. In many cities, vacant lots are rare and correspondingly expensive. In addition to the expensive building site, the high construction costs for new buildings also play a driving role: According to the Federal Statistical Office, the construction price index rose by 1.6 percent from 2019 to 2020 despite the corona-related VAT reduction.
Highest rise in Stuttgart
Both factors also play a decisive role in Stuttgart. Because in contrast to Hamburg and Berlin, the area of Stuttgart is limited due to the basin location. Building land is consequently even more sought-after and expensive, which in turn is reflected in the price development.
Within a year, the price of new apartments rose by 21 percent – the highest value of all cities examined. The square meter now costs more than 1,000 euros more, a year ago. Real estate buyers can now expect prices of 6,700 euros per square meter. For a family-friendly apartment, more than 500,000 euros are due.
Real estate buyers in Frankfurt have to spend even more money. After an increase of 15 percent, 6,890 euros are currently being charged for the square meter. New buildings are also becoming more expensive in Düsseldorf (+17 percent). The price level there is 5,740 euros per square meter.
Dortmund a third as expensive as Munich
A completely different price structure can be seen around 70 kilometers north-east of Düsseldorf: In Dortmund, the purchase prices of new apartments are significantly cheaper – a square meter costs € 3,210 there. For comparison: buyers pay around a third as much as in Munich. At the same time, Dortmund has the lowest prices of all the cities examined, despite an 11 percent increase. The neighboring food (+15 percent) is only slightly more expensive at 3,450 euros.
The low prices for new buildings in the two cities in the Ruhr area are mainly due to the significantly cheaper properties. The pure construction costs, however, hardly differ across Germany.
In addition to the Ruhr area, property buyers particularly get their money’s worth in the east. Both in Leipzig with 3,450 euros and in Dresden with 3,750 euros, the new building prices are comparatively low. Due to the increased demand, however, the price curve there is also pointing steeply upwards: Leipzig recorded an increase of 17 percent, Dresden one of 12 percent.
Existing apartments: big leap in Frankfurt
The rising prices for new buildings also ensure that the overall price level in cities rises – and with it the prices of existing apartments.
Frankfurt recorded the greatest price increase. Within a year, the asking prices increase by 21 percent. The square meter currently costs 5,320 euros and thus almost 1,000 euros more than in 2019. One reason for the rapid increase is the unbroken high demand for living space, which was fueled again by Brexit and the associated relocation of jobs in the banking segment.
Although Frankfurt has caught up a lot, living space in Munich is still significantly more expensive. After an increase of 8 percent, buyers currently have to pay 7,620 euros per square meter. A new high was also reached in Hamburg last year: in the Hanseatic city, the existing square meter now costs 4,620 euros per square meter – an increase of 8 percent within a year. Apartment buyers in Berlin pay a little less, but the asking prices for existing condominiums are also increasing in the capital: up 7 percent to 3,680 euros. (ots)
Calculation basis: The data basis for calculating the purchase prices were offers advertised on immowelt.de in 14 German cities with more than 500,000 inhabitants, which were offered in 2019 and 2020. Only offers that were increasingly in demand were considered. The values calculated using hedonic methods reflect the purchase price for an exemplary apartment with 3 rooms and 80 square meters on the 2nd floor. An existing building is a year of construction between 1945 and 2015 and a new building is a year of construction 2016 or later. These are offer prices, not closing prices.
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