Real estate prices in Germany have risen sharply in recent years – at least in some regions. Elsewhere, prices are going down instead. The current Postbank housing atlas shows in which regions property owners can expect an increase in value and in which districts a price decrease and thus a loss in value can be recorded.
Where are real estate prices rising in Germany and where are they falling? If you are interested in owning your own property, you should also consider that the values differ significantly in many districts. In this article you will find out in which regions you have to dig deeper into your pockets and where a loss in value is very likely.
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Great desire to own a home despite rising real estate prices
Many people dream of owning their own home. According to Interhyp study from 2021, 72 percent of the tenants surveyed stated that they would like to own their own property. Compared to 2019, this is an increase of six percent. The most sought-after are single-family houses, preferably in the countryside or on the outskirts of town. A study of Sparda banks after – also from the same year – the respondents gave several motives why they want to buy their own property. The main reasons were as follows:
- Free design options for your own property (72 percent of those surveyed)
- Desire to live in your own four walls (72 percent)
- Important contribution to retirement provision (71 percent)
- Security against dismissal (70 percent)
However, one should first look at how real estate prices will develop in the individual regions of Germany. Of the Postbank-Wohnatlas 2022 shows where real estate values will increase by 2035 and in which areas a decrease can be expected. A very clear scheme can be seen. It becomes more expensive in conurbations and metropolitan regions. On the other hand, it will be cheaper in many East German areas.
Real estate prices are increasing in these regions of southern Germany
Together with the Hamburger Weltwirtschaftsinstitut (HWWI), Postbank has created the Housing Atlas 2022 and has shown which regions will be affected by an increase in real estate prices. They examined the real estate price development in the 401 German districts and urban districts and created a purchase price forecast for the period 2021 to 2035.
In the south of Germany in particular, more precisely Baden-Württemberg and Bavaria, an annual price increase for real estate of up to two percent can be expected. Six regions alone are represented in the top 10 of all districts and urban districts with rising price trends: Munich, Miesbach district, Heilbronn, Landshut, Ebersberg district and Erding district.
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But also in Stuttgart and the surrounding area, real estate values will rise sharply by 2035. Such forecasts are also likely further south in the districts of Konstanz, Bodenseekreis and Lörrach. Annual price increases of more than two percent have also been forecast far beyond the Munich area.
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It is also becoming more expensive in the north and in the metropolitan regions
The housing atlas also shows that real estate prices will rise in the so-called “Big Seven”, which also includes Munich and Stuttgart. Berlin, Frankfurt am Main, Hamburg, Cologne and Düsseldorf are also affected. The price increases could amount to 0.65 percent to 2.19 percent annually.
Increases are also very likely in large cities such as Leipzig, Dresden, Darmstadt, Augsburg, Ingolstadt, Münster, Mainz, Regensburg, Freiburg and Ulm. In Potsdam, real estate prices are expected to rise by up to 2.2 percent, which is the highest value of all districts and urban districts in Germany.
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It is also surprising that homeowners in the north-west can expect their property to increase in value. To be more precise, it is the Weser-Ems region. These include the districts of Aurich, Ammerland, Emsland, Leer, etc. The trend is also upwards in the independent cities of Cloppenburg and Delmenhorst.
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The greatest depreciation is to be expected in eastern Germany
One man’s joy, the other’s sorrow – that’s roughly how you could describe the forecast price development in many regions of East Germany. In almost all districts and independent cities in Saxony, Saxony-Anhalt, Thuringia and Mecklenburg-Western Pomerania, real estate prices will fall by up to two percent annually. Price increases are only to be expected in large cities such as Jena, Erfurt and, as already mentioned, Dresden and Leipzig. Of course, this is not a good prognosis for real estate owners, but it is for those interested in buying.
In Brandenburg, on the other hand, things are looking better. Due to the proximity to Berlin, property owners in the so-called bacon belt can look forward to an increase in value. The trend is downwards only in the southeast (including the Oder-Spree district, the Spree-Neisse district, Frankfurt/Oder and Cottbus). But sharp price declines are also possible in parts of western Germany. The districts in Saarland are particularly affected. But real estate prices are also expected to fall in central Hesse and in the Rhine-Ruhr area by 2035.
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In short: Falling real estate prices have been forecast in structurally weak regions. In “booming” regions and large cities, the value of a single property can increase by up to two percent a year.
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