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Real estate market: Experts expect prices to continue to rise

2022-01-19T07:12:57.928Z

According to expert committees, the price rally on the real estate market is continuing. Buyers have to pay more and more money for apartments or even houses in the cities – and the surrounding areas are also becoming more expensive.



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Renovated and unrenovated old buildings in Berlin: Where and when will the bubble burst?

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Jens Kalaene / dpa

According to experts, the dream of owning your own four walls is becoming more and more expensive in the big cities.

There is no trend reversal in the eight largest German cities, as representatives of the respective official expert committees described on Tuesday evening.

"The party goes on," said the Berlin committee chairman Reiner Rössler on the price rally on the real estate market.

Representatives from Hamburg, Munich, Cologne, Frankfurt, Düsseldorf, Stuttgart and Leipzig also reported increases.

However, there is no real estate bubble on the housing market.

In many places, not enough apartments have been built to compensate for the influx of people over the past decade.

"Demand is unbroken, supply is scarce, prices are rising," summarized the Vice Chair of the Hamburg Expert Committee, Sonja Andresen.

»We don't have a corona break down.« The prices in the simple locations approached those of the middle ones.

Many people are therefore looking for apartments and houses on the outskirts and in the surrounding area.

"I wouldn't buy again in Frankfurt"

The price increases are also reflected in the surveys of the Federal Statistical Office.

In the third quarter, apartments and houses increased in price by an average of twelve percent compared to the same period last year.

This is the second time in a row that the price has risen the most since the time series began in 2000. And: not only in big cities, but also in rural areas, prices shot up.

"I wouldn't buy more in Frankfurt, but in the surrounding area yes," recommended the Frankfurt committee chairman Michael Debus at the conference of the Society for Geodesy, Geoinformation and Land Management.

In the city, the market has run too hot, but will probably bring further price increases.

The boom is also alarming for economists: among others, the German Institute for Economic Research (DIW) had recently warned of the bursting of real estate bubbles in some cities.

After more than a decade of rising prices, major price corrections can be expected in Berlin, Munich, Hamburg, but also in other large cities and university towns in the coming years.

There could be falling but also stagnating prices, said DIW study author Konstantin Kholodilin.

The speculative exaggerations would increase.

Condominiums and building plots in large cities are particularly affected.

"In the next few years there may be price corrections, i.e. real estate price bubbles bursting," he said, referring to an evaluation of data from the 114 largest German cities.

Working from home makes Hamburg's surrounding area more popular

The deputy head of the Hamburg expert committee explains the increase in prices in the surrounding area with the pandemic.

With the change to the home office, people are willing to accept longer commutes with commutes of up to one and a half hours, said Andresen.

At the same time, many people in the city in Munich tried to move into larger apartments themselves, said the local office manager Albert Fittkau.

"That's why the demand is still there."

Expert committees evaluate the notarial purchase contracts every year and determine, among other things, standard land values.

According to their data, in 2020 more money had flowed into real estate nationwide than ever before, at 310 billion euros.

Low interest rates, scarce living space, a lack of investment alternatives, especially for large investors, and a robust economy have been driving the real estate boom for a long time.

At the same time, expensive materials such as wood, cement and steel and scarce capacities in the construction industry are driving up construction prices.

apr/dpa

Source: spiegel

All business articles on 2022-01-19

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