Profitable real estate outside Germany’s major cities
The latest LBS and empirica Purchase Price Index reveals that asking prices for previously owned condominiums in Berlin rose dramatically year on year in Q1 2017 (+12.1% in comparison with Q1 2016), according to Immobilien Zeitung.
The analysis of condominium listings in Berlin’s major daily newspapers and online portals found that the average standard price had climbed to EUR 3,375/sq.m. The highest average price for previously owned condominiums was in Friedrichshain-Kreuzberg, where half of all previously owned condominiums are listed at prices above EUR 3,938/sq.m, followed by Charlottenburg-Wilmersdorf and Berlin-Mitte.
The largest jump in average asking prices was reported in Tempelhof-Schoneberg, where prices have surged by 16.3% in a year. The index’s authors conclude that it is now only really worthwhile buying in Charlottenburg-Wilmersdorf, Spandau, Steglitz-Zehlendorf, Reinickendorf, Treptow-Kopenick, Marzahn-Hellersdorf and Pankow.
According to the KSK-Immobilien analysis, previously owned condominiums in Cologne also experienced the strongest average annual price growth, rising by 9.4%. A five-year old apartment in Cologne now costs an average of EUR 2,914/sq.m.
Rental prices grew at a slightly slower pace in the markets analysed for the study. In Cologne, rents increased by an average of around 3.9%. In downtown Cologne, rents have now risen to an average EUR 12.69/sq.m. Across the city, rents now average EUR 10.50/sq.m, EUR 0.50/sq.m higher than a year earlier.
Positive population growth, increasing purchasing power and subdued construction activity all point to a continuation of current trends, conclude the study’s authors.
Meanwhile, real estate with solid value appreciation potential is still to be found in 45 of Germany’s 402 municipalities and independent cities, according to the Frankfurter Allgemeine Zeitung (FAZ). This was the key finding of a new Postbank study, conducted in collaboration with the Hamburg World Economic Institute.
In municipalities and cities with price increases of 0.5% until 2030, and price-to-rent ratios below 22.5 net annual cold rents, investment opportunities are classed as ‘good’. In Munich, Hamburg and Berlin, prices are running at around 30 net annual cold rents.
According to the study’s authors, would-be buyers should therefore consider markets outside Germany’s major cities, along with the regions surrounding metropolitan centres, such as the Main-Taunus district outside Frankfurt. (Source: German Real Estate News)
