Price Development 2018: Growth in West and East

According to a recent report by the “Immobilienweisen Expert Panel”, Germany-wide prices for both rents and condominiums developed positively once again. The comparison between eastern and western German cities showcases differences, however.

With the increasing potential in eastern Germany, differences between East and West start to fade. (Image:

The constant rise of real estate prices doesn’t pose a new development. In their Spring Real Estate Industry Report 2019, the “Immobilienweisen Expert Panel” of bulwiengesa, GfK, GEWOS and empirica now discloses how and where price increases have been the strongest in the previous year.

Germany-wide, charges for new rentals reached an average price of 7.06 Euro / sq m, which entails a rise by 3.9 percent when compared to the previous-year period. In the same period between 2016 and 2017, this transition still lied at 3.6 percent. Within the year 2018, this rise went mostly constant, whereby a price increase by one percent has been detected between the second and third quarter.

In comparison to that, rents increased the strongest in the west of the country. In independent cities, prices between 2017 and 2018 rose by 4.3 percent to 8.29 Euro / sq m, while western German counties had an increase by 4.1 percent to 7.02 Euro / sq m. According to the report, this led to the therefore highest rental price levels of the country. Eastern German independent cities and counties however recorded a less strong price increase with 2.4 percent each, which is presumable associated with the still low loans in this region. For instance, price levels of new rental contracts in independent cities (excluding Berlin) and counties lied at 6.48 Euro / sq m or 5.67 Euro / sq m respectively.

Similar conditions exist in regards to the purchase price development of condominiums. Germany-wide average price rose by 8.2 percent to around 1,875 Euro / sq m since the third quarter of 2017, whereby the growth rate between 2016 and 2017 remained the same. Even if the latter one lied at 2.5 percent in the first quarter of 2018 and only 1.8 percent in the third quarter compared to the previous quarters, this would be not a sign of a trend reversal. Since the beginning of the measurement in the first quarter of 2007, Germany wide rental and purchase prices increased by 36.8 percent or 77.1 percent respectively.

Analogous to rental prices, the strongest growth of purchase prices happened in the West as well. In independent cities, prices rose by 8.8 percent to 2,340 Euro / sq m and in western German counties by 8.6 percent to 1,900 Euro / sq m – which yet again led to the highest detected price levels. In comparison to that, price increases in eastern German independent cities were slightly under Germany-wide average levels. Here, purchase prices rose by 8.1 percent to 1,585 Euro / sq m. Prices in counties in the East developed significantly below average: Here, an increase by 4.4 percent led to 1,165 Euro / sq m.

This shouldn’t hide the fact that higher growth rates happened in eastern Germany between the quarters. While these decrease slightly Germany-wide and in the West in the period since the third quarter of 2017, increasing rates by 2.3 percent and 1.4 percent have been detected in eastern independent cities (excluding Berlin) or counties respectively. Aside from higher rents, this is yet another indicator for the high development potential in the East – and the continuously shrinking gap between East and West.

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