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Housing Market: Germany: Difference between revisions
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=== <big>Supply</big> === | === <big>Supply</big> === | ||
==== Forecats ==== | |||
By 2026, Europe will have finished building only about 1.5 million housing units (down 13% on 2023). '''For Germany, that means an expected decline of 35%. <ref>https://www.ifo.de/en/press-release/2024-02-20/european-residential-construction-pushes-sector-red</ref>'''<blockquote>“Due in particular to the sharp rise in construction and financing costs, it’s often no longer possible to build new homes in Germany. Politicians haven’t yet made a decisive improvement to the policy framework,” says ifo construction expert Ludwig Dorffmeister. “The resulting decline in the number of permits doesn’t bode well for the coming years.””</blockquote> | By 2026, Europe will have finished building only about 1.5 million housing units (down 13% on 2023). '''For Germany, that means an expected decline of 35%. <ref>https://www.ifo.de/en/press-release/2024-02-20/european-residential-construction-pushes-sector-red</ref>'''<blockquote>“Due in particular to the sharp rise in construction and financing costs, it’s often no longer possible to build new homes in Germany. Politicians haven’t yet made a decisive improvement to the policy framework,” says ifo construction expert Ludwig Dorffmeister. “The resulting decline in the number of permits doesn’t bode well for the coming years.””</blockquote> | ||
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===== Q4 2023 ===== | ===== Q4 2023 ===== | ||
'''On average in 2023, residential property prices fell by 8.4% compared to 2022'''. This was the largest year-on-year decline since the time series began in 2000 and the first decline since 2007. In the years from 2008 to 2022 Residential property prices have risen continuously on average over the year.<ref>https://www.destatis.de/DE/Presse/Pressemitteilungen/2024/03/PD24_114_61262.html</ref> | |||
* At -7.8%, the prices for existing properties fell more sharply than the prices for new buildings (-3.2%) compared to the same quarter of the previous year. | |||
* At -7.8%, the prices for existing properties fell more sharply than the prices for new buildings (-3.2%) compared to the same quarter of the previous year. | |||
* The prices for one- and two-family homes in the top 7 metropolises (Berlin, Hamburg, Munich, Cologne, Frankfurt am Main, Stuttgart and Düsseldorf) fell by an average of 9.1% compared to the 4th quarter of 2022, condominiums cost 5.8 % fewer | * The prices for one- and two-family homes in the top 7 metropolises (Berlin, Hamburg, Munich, Cologne, Frankfurt am Main, Stuttgart and Düsseldorf) fell by an average of 9.1% compared to the 4th quarter of 2022, condominiums cost 5.8 % fewer | ||
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According to the EPX mean index from the real estate transaction platform Europace, a newly built house (approx. 130 m² of living space, approx. 450 m² of land) cost an average of 567,606 euros in February 2024. For existing houses (built in 1983, approx. 120 m² of living space and approx. 425 m² of land) the average purchase price was 354,863 euros, for condominiums (built in 1985, approx. 83 m² of living space) it was 265,816 euros.<ref>https://www.schwaebisch-hall.de/baufinanzierung/kosten/immobilienpreise.html</ref> | |||
The overall index recorded its absolute peak in June 2022 with an index value of 224.87. Since then, underlying property prices and therefore the index have declined slightly. However, the price increase only continues for newly built houses and the other segments also stabilized in spring 2023. | |||
==== Forecasts 2024 ==== | ==== Forecasts 2024 ==== | ||
'''Schwäbisch Hall real estate expert Oliver Adler. (Source: Bausparkasse Schwäbisch Hall AG):''' | |||
My personal opinion is that in 2024 we will be in calmer waters for the residential real estate market overall.<ref>https://www.schwaebisch-hall.de/baufinanzierung/kosten/immobilienpreise.html</ref> | |||
* Thesis 1: '''The price decline will continue in 2024.''' We have not yet reached the bottom of pricing. Particularly for older properties with a lack of energy-related modernization, s'''ome experts expect, on average, a further price decline of 5 to 10 percen'''t. Smaller price discounts can be expected for newer, more energy-efficient buildings. However, since significantly fewer new properties will come onto the market, the discounts on used properties will shape the average value. | |||
* Thesis 2: '''In 2024, real estate prices will only fall slightly.''' The '''experts at DZ Bank expect a range between -0.5 and -2.5 percent'''. They also assume that negative characteristics, such as poor location or poor energy efficiency, will depress the price structure of real estate. But: If building interest rates fall faster than expected, this could cause property prices to rise again. | |||
* Thesis 3: We have a large, but difficult to quantify, potential of potential real estate buyers who have put their plans on hold since the rise in interest rates and are exploring the market. From 2024 onwards, they will increasingly appear as buyers and may build more new ones again because construction capacity will be freed up. The German Economic Institute in Cologne therefore sees higher real estate prices again from 2024. Another reason is the increased rental prices - by a total of 3 percent in 2023. According to DIW, they will continue to rise, solely due to the increasing total population. This makes housing more expensive for everyone, for buyers and tenants. | |||
==== Long Term Forecats ==== | ==== Long Term Forecats ==== | ||