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Rental apartments in Dresden: Tenants are becoming more modest
Photo: IMAGO / IMAGO/C3 Pictures
The Germans currently have little desire to spend money.
The daily shopping spoils the mood as well as the prospect of the upcoming utility bills from the landlord.
And the cause of the economic misery, Russia's ruler Vladimir Putin, is continuing his aggressive policy.
The general feeling of insecurity has also slowed down the willingness to go into debt beyond the neck brace for the dream of owning a house.
Experts even sensed a trend reversal in real estate prices, not least because the central banks had announced further interest rate hikes after the first.
The group of buyers and demand would inevitably shrink – and with them the prices.
In the second quarter of the year, it seemed like the pundits were right.
In the large metropolises, which had always set the trend in recent years, the run on real estate eased somewhat.
In some segments, the prices called for in the advertisements even fell noticeably.
However, the study that has now been published by the real estate portal Immoscout24 dampens hopes that the development will become more stable.
Because the asking prices are now rising again – albeit at a slower pace.
Existing condominiums were offered 0.9 percent more expensive in the third quarter of 2022 than in the previous quarter.
Newly built condominiums are becoming more expensive by one percent on average.
In the case of single-family homes, the asking prices for existing buildings will rise by 0.5 percent and for new builds by 1.9 percent.
The response to existing apartments, with an average of nine to 13 inquiries per month, is significantly greater than that to new-build condominiums, which receive an average of two to three inquiries per week.
With a price increase of 1.2 percent, Munich is still by far the most expensive metropolis in Germany for new buildings.
The square meter price in the third quarter was around 9837 euros and thus more than 3000 euros higher than in the other six metropolises.
In a comparison of the big ones, Cologne remains the only metropolis with a square meter asking price below the EUR 6,000 limit.
Otherwise, the asking prices range between almost 6400 and 6700 euros per square meter.
If you look at the market for existing apartments in the major cities, the picture is more mixed.
In Frankfurt am Main, Düsseldorf and Cologne, only minimal movements in asking prices can be observed.
Berlin and Hamburg are defying the currently moderate development in asking prices and are well above the national average with plus 3.2 and plus 2.8 percent.
After stagnating in the second quarter, Munich and Stuttgart saw a slight price decline of -1.1 and -1.4 percent respectively.
»We can see that the market in Germany is functioning and that it is calming down, especially in the metropolises.
The demand has reached the pre-Corona level," summarizes Thomas Schroeter, Managing Director of ImmoScout24.
The requests become more modest
However, the development on the rental market is more worrying: "Due to the shift in demand, we expect rental prices to develop much more dynamically than purchase prices in the coming months," explains Schroeter.
The asking rents for new apartments have increased by around 2.5 percent, and the premiums for existing apartments are 2.9 percent.
For many apartment seekers, the rents are becoming increasingly unaffordable - unless they noticeably cut back.
A trend that can now be observed more and more.
“The data clearly shows that smaller apartments are increasingly coming into focus when searching,” says Schroeter.
This applies in particular to apartments under 30 square meters and apartments up to 50 square meters.
Nevertheless, the real estate expert sees a reason for hope: he estimates that the prospect of higher rental yields could lead to more investment in new buildings.
This increases the chance that more supply will be created in the medium term.
However, the caprioles on the markets for building materials with drastic price increases for wood, steel and cement speak against this.
The financing of new construction projects does not become cheaper with rising interest rates.
The guilds of the building trade are already complaining about multiple cancellations of orders.
For the so-called housing barometer, Immoscout24 draws on around 8.5 million advertisements from the last five years.
The values are determined for reference objects for the respective property type under consideration.
For apartments for sale, a three-room apartment with 80 square meters of living space is taken as a basis.
The single-family house under consideration has 140 square meters of living space and a plot of 600 square meters.
The New Construction category contains all offers that are no more than two years old.
The experts calculate the demand in relation to the supply on the basis of the contact requests per advertisement of the respective property type per week.
This is a standardized value to compensate for the different lengths of time the advertisements stay on the portal.
The current offer purchase prices refer to the offer price in the third quarter of 2022.
