HomeBerlinHomeownership in Berlin: Are prices over? That’s how much the purchase price goes up
The Immoscout24 portal shows rising prices for condominiums and single-family homes in the second quarter. Is the best time to buy over?
Ulrich Paul
View of a condominiumimago stock&people
Apparently, the time when real estate prices fell is over – in Berlin as in many other cities. This is the result of information from the Internet portal Immoscout24 on asking prices for residential property in the second quarter of this year, which has now been published.
A distinction is made between new and existing buildings. All apartments that have been built in the past two years are considered new buildings. Apartments that are more than two years old are referred to as inventory.
According to Immoscout, the price of existing and new condominiums in Berlin rose by one percent in the second quarter. Asking prices for existing single-family homes rose by 1.5 percent, and new-build single-family homes rose by 1.7 percent.
For an existing condominium in Berlin, average purchase prices of 4,602 euros per square meter of living space were asked in the second quarter, and buyers should pay 6,155 euros per square meter for new buildings. Asking prices for existing single-family homes were EUR 4,817 per square meter, and EUR 5,828 per square meter for new builds.
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The asking prices in advertisements that were published on Immoscout were included in the study. It is not clear at what price the properties were sold in the end. Deviations are possible. The prices for condominiums refer to an 80 square meter three-room apartment. The single-family house serving as a reference has a size of 140 square meters of living space and a plot of 600 square meters.
Prices have fallen over the year as a whole
Despite the slight increase in purchase prices in the second quarter of this year, the bottom line is that prices in Berlin have fallen over the course of a whole year – between 1.6 percent for existing condominiums and 5.4 percent for existing single-family houses. This means that the strong price slump in the past year could not be compensated for by the prices that are now rising again. The reason for the interim drop in prices was that demand fell due to the development of real estate interest rates. Interest rates have roughly quadrupled since early 2022. As of July 2023, Immoscout determined an interest rate level of 3.8 percent for real estate financing over ten years.
For many households that were on the cusp of buying their own home before the turnaround in interest rates, the dream of owning their own four walls has become a distant dream with the rise in interest rates. In the meantime, however, those interested in buying seem to be at least partially adjusting to the changed conditions. On the one hand, because interest rates remain largely stable. On the other hand, because the pressure on the rental housing market has grown, as fewer households are buying property.
“Driven by the high level of competition on the rental market, the associated sharp rise in rental prices and the stabilization of the financing rate, the demand for properties to buy is increasingly returning,” says Immoscout Managing Director Gesa Crockford. “The asking prices are still well below the previous year’s values in some cases, but we are seeing moderately rising prices for the second quarter in a row,” she says. In view of the faltering new construction activity, this trend will probably continue. “At the moment there is still an excess supply on the purchase market, which leaves room for price negotiations,” says Crockford. “However, it remains to be seen how long this situation will continue.”
Demand for condominiums has increased in six major cities
According to Immoscout, the demand for condominiums has increased slightly in six of the seven largest German cities. In Berlin, demand is already above the pre-Corona level, and Hamburg and Munich are also almost at the level of the end of 2019. Demand for existing apartments only fell slightly in Düsseldorf in the second quarter, and for new-build apartments in Frankfurt am Main. Detached houses are experiencing a significant increase in demand in all major cities. Existing single-family homes in Munich recorded the highest increase in demand with almost 21 percentage points compared to the previous quarter.
Across Germany, asking prices for existing and new condominiums and existing single-family homes are growing by 1.8 percent. Newly built single-family homes are becoming more expensive by 1.9 percent.
In the seven largest cities, asking prices are also increasing for the second quarter in a row, albeit at a much more moderate rate than the national average. Existing apartments will increase by between 0.5 and 1.4 percent, new apartments will be between 0.4 and 1.2 percent more expensive. Interesting: During the same period, prices in the extended surrounding communities of the seven largest cities rose by an average of 1.5 percent.
Wave of rent increases in Berlin: Deutsche Wohnen and Vonovia too
Munich has the highest asking prices
In Cologne and Düsseldorf, the asking prices for condominiums at 1.2 to 1.4 percent, both in new buildings and in existing buildings, are showing the most significant price increase among the major cities. Nevertheless, asking prices in Cologne for existing apartments are still 4.1 percent and for new apartments 1.7 percent below last year’s prices. Munich, Frankfurt am Main and Stuttgart recorded the lowest price increases for both new buildings and existing properties, with a slight increase of between 0.4 and 0.6 percent. In Munich, the price reduction compared to the same period last year is currently the highest of the seven largest cities at minus 6.4 percent.
Compared to the other six major cities, condominiums and single-family homes in Berlin are cheap. Düsseldorf, Frankfurt am Main, Stuttgart, Hamburg and Munich are even more expensive. The Bavarian state capital has the highest prices with square meter prices of 7381 euros for existing condominiums and 9483 euros for new build condominiums. When it comes to condominiums, only Cologne is cheaper than Berlin, with prices per square meter of 4,436 euros for existing properties and 5,782 euros for new builds. When it comes to single-family homes, Berlin is the cheapest of the seven largest cities, both for existing and new builds. With square meter prices of 8,567 euros for existing properties and 10,261 euros for new builds, Munich is also the most expensive place for single-family homes.
2023-07-06 23:52:37
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