Anyone who wants to fulfill their dream of having their own four walls in Germany has to be prepared for rising costs. Higher construction prices also play a role.
Condominium buyers and home builders have to dig deeper and deeper into their pockets. According to a study, the average price for condominiums in Germany continued to rise in the past year.
In addition, there are rising construction prices. In August of the current year, according to the Federal Statistical Office on Thursday, the price of new apartments was higher than it has been since 1970.
The prices for condominiums increased on average from 2019 to 2020 by 10.2 percent to 225,242 euros, according to an analysis by the Institut der Deutschen Wirtschaft (IW) and the real estate service provider Accentro also published on Thursday. In Berlin, Munich, Hamburg, Dusseldorf, Stuttgart, Cologne and Frankfurt / Main, the prices climbed by an above-average 10.8 percent, where buyers had to put an average of 429,007 euros on the table for a condominium.
The purchase prices for apartments in 81 German cities were evaluated for the study. From the one-room apartment to the large luxury loft, all apartments were taken into account that are located in a divided residential building and can be purchased by private individuals.
Munich and Hamburg lead the way
According to the property report, apartments in Munich are particularly expensive. In 2020, the price for a condominium in the Bavarian capital averaged almost 580,000 euros. Hamburg ranks just behind with just under 503,000 euros. The most favorable location in the comparison of the 81 cities examined is the university town of Gera in the east of Thuringia. According to the information, a condominium there costs an average of 58,511 euros.
According to the evaluation, there was a sharp rise in prices for condominiums compared to the previous year in Osnabrück, Oldenburg, Koblenz and Heidelberg. There the prices climbed by 30 percent and more. By far the greatest increase in prices for condominiums in Wolfsburg: by almost 86 percent. This increase is mainly due to the sale of very high quality apartments.
At the same time, the prices for the new construction of conventionally manufactured residential buildings are rising. According to the Federal Statistical Office, in August they were 12.6 percent above the level of the same month last year. According to the Wiesbaden authority, a stronger increase was last measured in November 1970 with 13.1 percent compared to the same month of the previous year.
Influence of VAT
The withdrawal of the temporary VAT cut also plays a role in the current increase. In order to stimulate consumption in the Corona crisis, the federal government had temporarily reduced VAT from July 1, 2020 to December 31, 2020. The regular VAT rates have been in effect again since January 2021. Without this effect, according to the Federal Office, the construction prices would have risen by 9.7 percent in purely mathematical terms.
Added to this are increased material costs. According to statisticians, construction timber, for example, was 46.5 percent more expensive in August this year than a year earlier due to the increased demand at home and abroad. Increased material costs caused difficulties, especially in ongoing construction projects, reported IW real estate expert Michael Voigtländer: “There are project developers who have problems because they sold at fixed prices some time ago and are now discovering that the costs are getting out of hand.” Further burdens are the shortage of skilled workers in the trade and expensive building plots.
“Due to the rising building prices, which are historically high, an existing property is becoming much more interesting for the population than a new building,” said Lars Schriewer from Accentro. The high construction costs will not change anytime soon as long as the logistics problems caused by Corona persist.
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
