House prices up 12% during the year to Q1 2020
Germany’s housing market continues to strengthen, with the average price of apartments rising by a whopping 12% during the year to Q1 2020, following y-o-y rises of 11.15% in Q4 2019, 9.46% in Q3, 8.21% in Q2, and 9.23% in Q1. On a quarterly basis, house prices increased 3.78% in Q1 2020.
Strong demand, improving 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.
Construction activity is now improving gradually. In Q1 2020, dwelling permits rose by 1.6% y-o-y to 33,949 units, following a 1% growth in 2019, 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:The German economy plunged into recession at the start of 2020, with real GDP shrinking by 2.2% in Q1 2020 following a 0.1% decline in Q4 2019. It was the biggest quarterly drop since the 2008 financial crisis. The economy is projected to contract by 6.5% this year, following a miniscule growth of 0.6% in 2019, based on figures from the European Commission.
