Berlin, September 23, 2019 – A total of 124,467 condominiums were sold in 2018 across the 82 major German cities included in the survey. This figure represents a 2.51 percent decrease compared to the previous year. Sales of condominiums had already fallen by 5.62 percent the year before. However, sales volume rose by 4.14 percent, whereas the previous year had seen a slight decline in sales volume.
The pace of purchase price growth accelerated significantly in 2018—while condominiums became 6.82 percent more expensive on average in 2018, the price increase a year earlier was 4.52 percent. Rising purchase prices led to a 4.14 percent increase in sales volume in 2018 compared to the previous year, reaching 31.57 billion euros.
“The figures from the ACCENTRO Homeownership Report 2019 show that the trend of sharply rising purchase prices, which has persisted for a good ten years, has not yet slowed but is actually accelerating. The reasons for this are persistently low interest rates as well as the continued enormous excess demand, which is reflected in higher prices, particularly in major cities,” explains Jacopo Mingazzini, CEO of ACCENTRO Real Estate AG.
Average Purchase Price Exceeds 250,000 Euros for the First Time
The average purchase price of an apartment in the 82 major German cities surveyed stood at 253,674 euros in 2018, surpassing the quarter-million mark for the first time. In six cities, apartments cost an average of more than 300,000 euros; in three of those, the average price even exceeded 400,000 euros. Buyers paid particularly high prices in metropolitan areas, where the population, economic strength, and thus housing demand are concentrated.
Increased Price Growth in Berlin
In the German capital, the average purchase price for a condominium in 2018 was 321,578 euros—an increase of 21.83 percent compared to the previous year. Within a single year, prices rose by more than one-fifth despite a decline in the share of new construction. In contrast, the increase in the previous year had been just 5.50 percent. Berlin thus saw significantly increased price momentum in 2018; there is therefore no sign of a slowdown in demand. However, supply continues to be unable to keep pace with this high demand. The number of new-construction apartments sold in 2018 declined sharply compared to the previous year, both nationwide (-11.62 percent) and specifically in Berlin (-21.24 percent). “Since there are currently no indications that interest rates will rise anytime soon, it is likely that purchase prices will continue to rise. However, the declining sales figures show that the housing market in major cities is becoming increasingly tight and that buying a condominium is becoming more and more difficult,” Mingazzini continues.
Plunging Sales Figures for New Construction
As early as 2017, the ACCENTRO Homeownership Report documented a 13.72 percent slump in sales of new-construction apartments—a trend that is now being confirmed. The market is becoming increasingly tight, particularly in the “Top 7” cities—the seven most populous metropolitan areas in Germany. In Berlin, the largest and most important housing market, sales of new-construction apartments fell by 21.24 percent; in Frankfurt am Main, by 21.19 percent; and in Düsseldorf and Cologne, by as much as 33.44 percent and 45.84 percent, respectively. Of the seven major cities, only Hamburg stands out with positive results: the number of new-construction apartments sold in the Hanseatic city increased by 14.89 percent.
“The consequence of this overall drastic decline in new-construction sales and the resulting shrinking market is that buyers are hardly able to find a property that suits their needs. This growing discrepancy is likely one of the main reasons why the rise in purchase prices in 2018 accelerated significantly compared to the previous year,” says Mingazzini.
“Given the current level of construction activity in Germany, we must expect this trend to continue or even intensify. In the first half of 2019, the number of approved new condominiums in Germany declined by 7.9 percent, according to the Federal Statistical Office. One reason for this is likely that residential construction—and in particular the construction of condominiums—is not a political priority; the public debate focuses primarily on the rental housing market,” Mingazzini continues.
About the ACCENTRO Homeownership Report
This marks the twelfth time that ACCENTRO Real Estate AG has published the Homeownership Report. The analysis is based on homeownership transactions from the 2018 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.
Detailed results from the ACCENTRO Homeownership Report on Germany’s ten most populous cities and trends over the past eleven years are also available online in the ACCENTRO database and can be filtered individually.
About ACCENTRO Real Estate AG
ACCENTRO Real Estate AG is a residential real estate investor and the market leader in residential 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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