For more than 15 years, the Cologne Institute for Economic Research (IW Köln) has been comparing major German cities and publishing its findings in various rankings—this year, Berlin ranks first among the most dynamic cities for the first time. According to the study conducted by the Cologne Institute for Economic Research (IW Köln) on behalf of WirtschaftsWoche and ImmobilienScout24, Darmstadt is the most future-proof city. The winner of the “level” ranking, which reflects the current state of affairs, is Munich (source: www.iwconsult.de).
Darmstadt and Jena have great potential for the future
The authors of the study attribute Berlin’s rise to the top of the dynamism ranking primarily to the high level of dynamism in population growth, the labor market, and the real estate market. Berlin gained 250,000 residents between 2012 and 2017, and prices for condominiums and apartment rents also rose sharply. Leipzig is also highlighted in the study for its high dynamism; the Saxon city ranks ninth in this ranking—which examines changes in 36 indicators over a five-year period—making it the top-ranked city in eastern Germany.
The city with the best future prospects, Darmstadt, benefits from its location in the prosperous Rhine-Main region. Added to this is a large number of innovative companies, according to the study’s authors (source: www.zeit.de). The chemical company Merck, with 11,000 employees in the major city in southern Hesse, is highlighted in particular. Also noteworthy in the future ranking is Jena’s placement—the city in Thuringia has the fifth-best future prospects among all major German cities. The high proportion of college graduates in Jena is the primary factor behind this positive assessment, as nearly one-third of the workforce holds a college degree. The reason for this high rate appears to be an active policy of attracting research institutes to the city.
Berlin and Leipzig Have Dynamic Housing Markets
Munich ranks second in both the “Dynamism” and “Future Prospects” rankings and tops the “Overall Quality” ranking. This marks the seventh consecutive year that the Bavarian capital has held the top spot. Apart from Munich, the study particularly highlights the Middle Franconia region, which includes the cities of Erlangen, Nuremberg, and Fürth. It states that a new “economic powerhouse” has emerged there, characterized by a very strong labor market and a dynamic real estate market. The highest-ranked city in eastern Germany in the quality ranking is Potsdam, at number 17.
As far as the real estate market is concerned, Berlin has shown the greatest momentum over the past five years. According to the study, rental prices rose by 37.5 percent between 2014 and 2019—nearly twice as much as the average for all major cities surveyed. Condominium prices in the German capital actually increased by 77.1 percent during this period. Leipzig also stood out with a 74.4 percent increase.
