Berlin, September 13, 2017 – In 2016, sales in Germany’s major cities once again reached a record high: Total sales rose from 28.5 billion euros to 30.87 billion euros. However, the number of sales has stagnated. In the 82 major cities surveyed, a total of 135,551 existing and newly built condominiums were sold. This represents a slight decrease of 851 sales compared to the previous year. Three of the top seven locations—Berlin, Cologne, and Stuttgart—even recorded a decline.
Overregulation and a shortage of supply are responsible for the decline in transactions
“The negative trend in Berlin, Stuttgart, and Cologne is a clear sign of a growing shortage of supply. Berlin, in particular, is also affected by political overregulation,” says Jacopo Mingazzini, CEO of ACCENTRO Real Estate AG. Although the German capital accounts for by far the most sales of any major German city, with 22,549, the number of sales fell by 7.42 percent compared to the previous year due to political overregulation and a shortage of supply.
Fewer Permits for Infill Development: Supply Shortage Could Worsen
Although the number of building permits rose by 21.6 percent nationwide in 2016, the figures were already on the decline again in the first months of 2017. In particular, the number of permits for new apartments resulting from conversion and expansion projects (infill development) fell by 25.5 percent compared to the same period last year. “This trend could further exacerbate the housing shortage in major cities, which was already clearly evident in 2016. Purchase prices are likely to continue rising overall, though not at the very high levels seen in recent years,” Mingazzini affirms.
Strong Demand for New-Construction Condos
In 2016, 34,731 new-construction units were sold, representing a 14.49 percent increase over the previous year. This marks another significant acceleration in the existing momentum of new-construction condominium sales, as the increase in new-construction sales from 2014 to 2015 was 12.31 percent. In 2016, Berlin was the most important market for new-construction condominiums in Germany. In the federal capital, 5,608 new-construction condominiums were sold during the reporting year, an increase of 7.72 percent. Berlin continues to expand its leading position in new-construction sales after more apartments were sold in the federal capital than in Munich for the first time in 2015.
Berlin Shows the Highest Price Growth in a Ten-Year Comparison
The survey shows that Berlin has recorded by far the largest price increases over the past ten years: The average price per apartment sold in the capital rose by 160.26 percent from 2006 to 2016—more than in any other major German city. Despite the sharp price increase over the past decade, however, Berlin currently ranks only twelfth in terms of average price per apartment, still behind cities such as Ulm, Heidelberg, and Mainz. With sales now totaling 5.64 billion euros, Berlin has nearly tripled its revenue from condominium sales since 2006.
Ten-Year Comparison: Leipzig Stands Out
Leipzig deserves special mention in the ten-year comparison. Sales in the Saxon metropolis have grown at an exceptionally dynamic pace. In 2006, 2,542 apartments were sold in Saxony’s largest city; by 2016, that number had risen to 4,877. That represents nearly a doubling of sales volume, while revenue has more than tripled. “Leipzig plays a prominent role in the market for condominiums. It is popular among young people because of its attractive cost of living, a very vibrant cultural and university scene, and its outstanding economic development. The city has recorded population growth of more than 14 percent since 2006, ranking second only to Munich, which has seen growth of just over 19 percent,” explains Mingazzini.
Eastern German Cities on a Growth Trajectory
Three East German cities—Leipzig, Erfurt, and Rostock—dominate sales trends in the ten-year review. This is evidence of the long-term momentum in the East German homeownership market. In Rostock and Potsdam, purchase prices have more than doubled over the past ten years, while in Dresden and Erfurt, they have nearly doubled. With the state capitals Magdeburg and Erfurt, as well as Halle, three East German cities rank among the top 10 in terms of sales trends per 1,000 residents. With a 58.33 percent increase in sales per 1,000 residents, Magdeburg even ranks second nationwide.
About the ACCENTRO Homeownership Report
This marks the tenth time that ACCENTRO Real Estate AG has published the Homeownership Report. The analysis is based on homeownership transactions from the 2016 reporting year in all 82 major German cities. By drawing on data from appraisal committees, the report differs significantly from similar publications, which are usually based on expert estimates or the analysis of listing data.
About ACCENTRO Real Estate AG
ACCENTRO Real Estate AG is a residential real estate investor and the market leader in housing privatization in Germany. As of December 31, 2020, its real estate portfolio comprised approximately 5,200 units. In addition to Berlin, its regional focus includes major cities and metropolitan areas in eastern Germany, as well as the Rhine-Ruhr metropolitan region and Bavaria. ACCENTRO’s business activities encompass four core areas. These include the tenant-oriented sale of apartments to owner-occupiers and private investors, the sale of real estate portfolios to institutional investors, the development and management of its own real estate portfolio, and the marketing of apartments for property owners, investors, and project developers. The shares of ACCENTRO Real Estate AG are listed on the Prime Standard of the Frankfurt Stock Exchange (WKN: A0KFKB, ISIN: DE000A0KFKB3). investors.accentro.de
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