Real estate prices are rising, leaving rents behind. The so-called multiplier is an important yardstick for the ratio of regional purchase to rental prices. It shows how many annual net rents would have to be paid on average for an existing condominium of the same size.
On average across all German districts and independent cities, the multiplier in 2020 was 25.7. In 2019, buyers still had to pay an average of 24 annual net rent to buy an apartment. This means that purchase prices have once again risen faster than rents overall. Signs of overheating are particularly evident in large cities. These are the results of the Postbank Housing Atlas, for which the Hamburg World Economic Institute examined the housing markets in the 401 German districts and urban districts.
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Berlin is ahead for the first time
The dynamics are accelerating. Since 2017, the multiplier has increased annually by around one annual rent, most recently the increase over the year was even steeper with an increase of 1.7 annual rent. “We do not expect any trend reversal due to Corona. At best regionally, economic downturns caused by pandemics could lead to less demand in certain sectors if disposable incomes fall, ”says Eva Grunwald, Head of Postbank Real Estate.
The lower the local multiplier, the greater the benefits for buyers. Nationwide, the range extends from almost twelve annual net rents for buying a condominium in the district of Mansfeld-Südharz in Saxony-Anhalt to up to 75 rents in the district of North Friesland on the North Sea , which also includes the coveted locations on Sylt, Föhr and Amrum. Experts are currently speaking of a still moderate purchase price level for a multiplier of less than 25, measured against the local net rents.
Purchase prices in the seven largest German cities are rapidly outpacing rent levels. Compared to the previous year, the average plus across the seven cities is two annual rents. This year, the ranking leads Berlin for the first time: Berliners had to shell out almost 40 annual rents in 2020 to buy an apartment. This means that the federal capital achieved one of the highest values in Germany and, with an increase of around four annual rents compared to the previous year, the strongest increase among the Big Seven. The main reason for this dynamic was the Berlin rent cap, which came into force in February 2020 and was overturned by the Federal Constitutional Court in April 2021. This regulation led to a decrease in net rents within a year by more than four percent and thus to a very high increase in the multiplier in the federal capital.
The value (multiplier) shows how many annual net rents would have to be paid on average for an existing condominium of the same size, in 2020 and 2019.
The seven largest cities
- Berlin: 39,7/35,5
- Munich: 38.5 / 37.2
- Hamburg: 38,4/36
- Frankfurt Main: 35,0/33,5
- Düsseldorf: 33,4/31,3
- Cologne: 29.5 / 28.2
- Stuttgart: 28,7/27,7
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The value (multiplier) shows how many annual net rents would have to be paid on average for an existing condominium of the same size, in 2020 and 2019.
The Saxony region
- Dresden: 30,9/27,8
- Leipzig: 30,9/27,1
- Chemnitz: 20,9/19,9
- District Bautzen: 19.7 / 18
- LK Görlitz: 14.2 / 13.8
- LK Meissen: 24.2 / 22.0
- LK Saxons. Switzerland / East: 23.4 / 22.0
- LK Zwickau: 14.3 / 13.4
- Erzgebirgskreis: 16,0/15,4
- Vogtlandkreis: 14,2/12,7
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“Those interested in buying should be very vigilant in the Big Seven and check carefully whether the high prices are justified,” advises Grunwald. A move to the surrounding area might also be an option. There are still comparatively cheaper properties around Berlin and Hamburg in particular. The multiplier in the Märkisch-Oderland district in Brandenburg is 26. In the Duchy of Lauenburg at the gates of Hamburg, an average of 24.7 annual rents are due for residential property, in Stade 24.9 and in Pinneberg 25.0. The chances of cheaper prices in relation to the rent level in the Munich area are less. The multiplier is nowhere below 35 in the neighboring districts. The Starnberg district even has a higher multiplier at 39.5 than the Bavarian capital itself. In comparison, the prices in the Görlitz district are low with a multiplier of 14.2.
But also in German cities apart from the Big Seven, the purchase prices in 2020 are at a high level compared to the cold rents. Buyers in 23 cities with more than 20,000 inhabitants had to pay 30 annual rents and more. In relation to the local rent level, the most expensive cities with more than 100,000 inhabitants include Berlin, Munich, Hamburg, Frankfurt and Düsseldorf as well as Rostock (duplicators 36.1) and Potsdam (32.8). The top ten also include the medium-sized towns of Rosenheim (34.3), Landshut (33.3) and Baden-Baden (32.7). In Saxony, Dresden and Leipzig are at the top at 30.9.
Chemnitz cheap in comparison
However, the purchase prices do not run away from the local rent level in all cities, and there are good chances of getting away from a rented apartment into your own four walls even cheaper. Among the large cities with more than 100,000 inhabitants, this is most likely to be the case in Gelsenkirchen (duplicator 18.0) and Salzgitter (19.1). The average prices for residential property in Bremerhaven, Duisburg, Oberhausen, Hamm, Bochum, Chemnitz and Wuppertal range between 20 and 21 annual rents.
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In a total of 41 cities with more than 20,000 inhabitants, the multiplier is below 25.0 and thus comparatively moderate. “Anyone who has the chance to purchase a condominium according to their wishes, where the monthly charge is not more expensive in relation to the rent, should consider purchasing it. Because real estate owners also build up their assets: Your own four walls are a good way of providing old age, ”says Grunwald. (rnw / saf)
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