Whether in Hamburg, Frankfurt or Düsseldorf: Buying your own home is becoming more expensive again. Is this already the end of a correction?
Is buying your own home becoming more expensive again? The Kiel Institute for the World Economy (IfW) has registered a turnaround in the German real estate market. Prices for condominiums, single-family homes and multi-family homes rose between April and June compared to the previous quarter, the IfW reported.
“The turnaround in the real estate market has begun,” said IfW researcher Jonas Zdrzalek. According to the scientist, uncertainty among prospective buyers is clearly decreasing, and the prospect of falling interest rates is stabilizing the market. The collapse in new construction business is also reducing supply and leading to rising prices.
Compared to the first three months of the year, prices for condominiums rose by 2.4 percent in the second quarter. Single-family homes cost two percent more. Prices for multi-family homes rose by 4.4 percent. In the previous quarter, prices had fallen. The information is based on the Greix real estate price index, which contains data from 19 cities and the Rhein-Erft district near Cologne. The IfW is one of the institutes involved in Greix.
Rising prices in Hamburg, falling in Cologne
Among Germany’s seven most populous cities, prices for condominiums rose most compared to the previous quarter in Hamburg (4.3 percent), Frankfurt (3.7 percent) and Düsseldorf (2.2 percent). In Stuttgart, apartments became 0.6 percent more expensive. In Cologne, prices fell by 0.6 percent. No current data was available for Berlin and Munich. Outside the category of the seven most populous cities, prices for condominiums rose significantly in Münster – by 5.6 percent.
End of correction possible
The IfW believes it is possible that a correction in the real estate market will end after around two years. A correction is usually understood as a downward movement, for example in an index, which corrects excessive values. Greix recorded a price decline of around 14 percent in around two years, the IfW reported. The correction was most severe in Stuttgart, where prices fell by more than 20 percent.
Source: Stern
