Real estate in the city is scarce: tenants are also looking in the surrounding area

Due to the strong excess demand on the housing market, more and more people from major cities are also looking to the surrounding areas when searching for a rental apartment. The online portal Immoscout 24 was able to prove this by analyzing rental requests. Immoscout 24 found that in January 2024, for the first time, more residents of the seven German cities were looking for a new rental apartment in the surrounding area (41.9 percent) than within the city (35.8 percent). A year earlier, more people had looked within the city (43.8 percent) than outside the city (35 percent). The rest wanted to move to another city or to the countryside. This trend seems to be particularly prevalent in the German capital. According to Immoscout 24, the proportion of those looking for a rental apartment in Berlin has fallen by 9.5 percentage points compared to the previous year. This means that 43.1% of Berliners are currently looking for a new rental apartment within the city, compared to over 60% in 2019.

Buying condominiums is worthwhile in many regions

Now is a good time to invest in residential property. This is according to the Postbank Housing Atlas 2024, which was compiled by experts from the Hamburg Institute of International Economics (HWWI) on behalf of Postbank. According to the study, condominiums were cheaper in around 96% of all German regions last year than in 2022.

The top 7 metropolitan areas were hit harder by the price decline than other large cities, medium-sized cities and rural districts. On average across Germany, prices for owner-occupied apartments fell by 10.1% after adjusting for inflation - in 2022, the real decline compared to the previous year was still 0.7%. In nominal terms, i.e. not adjusted for inflation, prices fell by an average of 4.2% across all 400 districts and independent cities. Experts cite falling demand as a result of rising interest rates, uncertain framework conditions for subsidies, falling real wages and rising living, construction and renovation costs as the reasons for the price decline.

According to calculations by the HWWI, purchase prices for apartments in the top 7 cities fell by 12.7 percent in real terms - in the other major cities by 11.4 percent, in the medium-sized cities by 10.8 percent and in all rural districts by 9.7 percent. For investors who want to invest in a property, it is particularly worth taking a look at the medium-sized cities with 20,000 to 100,000 inhabitants - this is the conclusion reached by the authors of the Residential Atlas, as the largest price increases in 2023 were in the medium-sized cities.

At 7.5 percent, the real decline in purchase prices in the German capital was low compared to the other top 7 cities. According to the experts, Berlin still has some catching up to do, as the price level is still below that of other major cities.

Smart meters on the rise: more acceptance among building users

When it comes to saving energy, smart meters have great potential. They measure electricity consumption and transmit this information directly to the electricity grid operator via a smart meter gateway. This allows consumers to monitor their electricity consumption in real time. In a smart home, the system can also activate certain devices such as an electric heat pump or a charging station for electric vehicles as soon as surplus wind or solar power is fed into the grid.

As a representative survey by Bitcoin shows, more and more people in Germany are now willing to share data about their own energy consumption with the grid operator in real time. In the Bitkom study, almost two thirds of respondents (63%) stated that they could imagine using an intelligent electricity meter (smart meter) in the future. In 2020, this figure was only 36%. 69% of those surveyed would also be prepared to pass on their own consumption data anonymously in order to save on heating costs in the future - only 22% answered this question in the negative. On behalf of the digital association Bitkom, 1,005 people in Germany aged 18 and over were surveyed by telephone in February and March 2024 about their attitudes towards smart meters.

According to the digital association Bitkom, fewer than 300,000 of the 52 million electricity meters installed in Germany were smart meters at the end of 2022. There are now expected to be between 800,000 and one million. The law passed in 2023 to restart the digitalization of the energy transition may have contributed to this. Many potential users have so far been reluctant to use smart meters. Critics complain that the data from a smart meter also allows conclusions to be drawn about residents' behavior. However, the data recorded at the radiators may only be used for billing purposes.

Heat pumps

How economical the heat pump is as a heating technology depends largely on the CO2 price. Researchers at the Fraunhofer Institute for Solar Energy Systems (ISE) have established this in a recent analysis as part of the Ariadne energy transition project. They came to the conclusion that heat pump heating systems are more cost-effective than gas heating systems - provided that not only the investment in the purchase is taken into account, but also all expected costs, such as energy source prices including any CO2 costs. A period of 20 years was considered.

The ratio of electricity, gas and, if applicable, district heating is the decisive factor when choosing the most cost-effective heating system.

For 2024, the German government has provided a funding volume of 16.7 billion euros for the program to replace old heating systems with more environmentally friendly solutions. This is supplemented by a KfW program that offers low-interest loans. Private households can receive a cost reimbursement of up to 70 percent for the installation of heat pumps.

Heat pumps are said to be particularly environmentally friendly and cost-efficient in single-family homes. According to the Ariadne study, the overall costs can be further reduced by using photovoltaic systems for your own electricity consumption. Even in apartment buildings, switching to heat pumps is a more cost-efficient option compared to new gas heating systems. This advantageous cost structure also applies to unrenovated or only partially renovated old buildings, although they have higher consumption and investment costs compared to completely energy-renovated old buildings.

The study referred to by ISE focuses on existing residential buildings, taking into account the funding measures of the Building Energy Act (GEG) valid from January 1, 2024 and the federal funding for efficient individual building measures (BEG-EM). The focus is on the costs of replacing heating systems and assessing the emissions of various technologies.