CEPI reports:Average prices of German condominiums in 2012 are still below 1992 levels

Prices and rents for residential property increased moderately in Germany contrary to public perception. Price increases of 3,1 percent for condominiums and rents are listed in the recently released IVD residential pricelist for 2012/2013. Above-average increases in prices and rents were to be observed only in large cities and only in individual prime locations with good and very good residential quality. “Therefore one cannot speak of the often quoted formation of a real estate bubble in Germany", confirms CEPI member organization IVD.

The price increases are part of a long overdue catch-up process in the German residential real estate market”, explains Jens-Ulrich Kießling, IVD president. The average price level of condominiums in the year 2012 is still clearly below that of 1992. Twenty years ago owner-occupied and rented apartments were significantly more expensive. The market environment for 2012/2013 in contrast is still inexpensive. This applies to all residential categories. “Moreover the current price increases are driven by a real demand for living space.”

The current price per square meter for a residential apartment of average quality in Germany is 998 Euro, which is 3,1 percent more than in the year 2011. “Unlike previous years, there are hardly any regions or residential categories which are affected by falls in prices” , Kießling says. Nevertheless there are strong fluctuations within the range of price increases. “As in recent years the general rule of thumb is that the better the quality of the residence and the bigger the city, the higher the price increase”, Kießling says. The least notable are the price increases for condominiums in small cities of fewer than 30.000 inhabitants – here prices for condominiums listed are mostly no more than one percent above those of the previous year. In cities with more than 500.000 inhabitants the price increases are between 3,8 percent (for residences of average quality) and 9,1 percent (for high quality residences). This can be attributed mainly to the continuous growth of the population in Germany´s larger cities. This is characterized by the increasing movement of high-income households into the inner cities. “Therefore this is not speculation but a natural increase in demand resulting in rising prices and rents, but no increase in investment risk.” Against the background of further migration and typical costumer household income the purchase of condominiums in large cities in Germany provides a high level of security. The same applies for demographically strong small and medium-sized cities.

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