House prices up 8.25% during the year to Q3 2021
Germany’s housing market remains vibrant, amidst improving economic conditions. The average price of apartments rose by 8.25% during the year to Q3 2021, following y-o-y rises of 8.38% in Q2 2021, 7.95% in Q1 2021, 8.8% in Q4 2020, and 7.38% in Q3 2020. On a quarterly basis, house prices increased 2.25% in Q3 2021.
Germany’s housing market has been growing continuously in the past six years, with house prices up by more than 70% from Q1 2014.
Strong demand, rising construction activity
Demand remains strong, buoyed by low interest rates, urbanization, and healthy household finances. In recent years, the migration crisis and strong economic growth have added to the already strong demand in the country.
In fact despite the pandemic, residential construction activity continues to rise. In the first three quarters of 2021, dwelling permits rose by 4.8% y-o-y to 282,420 units, following an annual growth of 2.2% in 2020, 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 grew by 10% y-o-y in Q2 and another 2.5% y-o-y in Q3 2021, after posting five consecutive quarters of y-o-y declines, mainly driven by higher household consumption and government spending. On a quarterly basis, Europe’s largest economy expanded by 1.7%. The European Commission expects the German economy to grow by 2.7% this year, following a 4.6% decline in 2020.