Real estate values in Germany in 2022

Real estate prices in Germany are constantly rising at a very high rate. German citizens have known this for a long time. Thus, from July to September 2021, housing here has risen by 12% compared to last year.

Report by Oldypak Capital LP property management
Report by Oldypak Capital LP property management

I am Expat publishes data on the monthly rise in price of the housing market in this country ” According to The crisis caused by the coronavirus pandemic has not affected the situation with the cost of real estate in Germany, it continues to grow at the same rate. Appreciation for the third quarter according to Destatis (Federal Statistical Office) was about 12%. That is even higher than the increase from April to June 2021 (10.8%) and the biggest since 2000. The Wiesbaden Institute studied the rising price trend for houses and apartments in the country’s major cities.

In seven of them, the price increase was about 14.5%. Berlin, Hamburg, Frankfurt, Cologne, Munich, Düsseldorf and Stuttgart fell into this statistic. Rural Germany has also seen an increase in housing costs. Where the density of the rural population is higher, the prices of houses with one or two apartments have increased significantly. The cost of an entire homestead (condominium) has increased by 12.3%. In rural areas with lower population densities, the price of one- or two-family homes increased by 15.5%, and the cost of condominiums increased by 11.2%. The reason for the rise in housing costs Real estate experts point to several reasons for the rapid increase in home prices in Germany: the high growth of the economy; the ever-increasing demand for real estate; difficulties with investment opportunities; low interest rates. These are the main factors cited by experts as influencing the growth of housing costs in a developed European country.

Due to the rising prices of basic building materials (steel, wood, concrete) the cost of housing construction has risen. The construction industry, in addition, is experiencing labor shortages. According to oldypak capital lp property 2022 report, the coronavirus pandemic has contributed to the rise in the cost of residential real estate. More and more employees are working remotely, from home. But employers want labor efficiency to remain high. Often people leave the cities to buy cheaper housing in the countryside, in the fresh air. This increased demand has caused an increase in real estate prices in these areas.

But this increase in value has affected the entire country. In metropolitan areas, the number of residents in need of housing is growing, and migration to rural areas is causing increased demand for housing there as well. Reduced interest rates lead to a sale of real estate in Germany at a higher price, but it also leads to a steady rise in prices. And although, according to oldypak capital lp property 2022 report, it is possible to create a situation that leads to a drop in prices on the housing market, but there will be no return to the previous value.

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