House prices up 11.15% y-o-y during 2019
Germany’s housing market continues to grow stronger, with the average price of apartments rising by a whopping 11.15% during 2019, a sharp improvement from last year’s 6.78% growth. In fact, it was the biggest y-o-y growth since 2005, when Europace started to publish data. On a quarterly basis, house prices increased 2.95% in Q4 2019.
Strong demand, low construction activity
Demand remains strong, buoyed by low interest rates, urbanization, and healthy household finances. Recently, the migration crisis and strong economic growth have added to the already strong demand in the country.
Despite this, construction activity remains weak. In the first eleven months of 2019, dwelling permits rose by meager 0.5% to 281,275 units compared to the same period last year, according to the Federal Statistical Office (Destatis).
Rents, rental yields: moderate yields at 2.9% to 3.7%
Berlin apartment costs are around €4,991per sq. m.
Germany: city centre apartment, buying price, monthly rent (120 sq. m.)
|Buying price||Rate per month||Yield|
|Berlin||€ 598,920||€ 1,493||2.99%|
|Frankfurt||€ 544,680||€ 1,678||3.70%|
|Munich||€ 942,360||€ 2,243||2.86%|
Recent news: Germany’s economy registered lacklustre growth in 2019, with real GDP growth of just 0.6%, sharply down from 1.5% in 2018 and the weakest expansion since 2013, based on figures from the European Commission. Europe’s largest economy is expected to continue to struggle this year, with a GDP forecast of just 1.1%. Germany’s export-reliant economy was hit by the falling global demand for capital goods, with regional political uncertainty and structural changes in the automotive industry adding to the burden.