In the latest Red Rock Investment Residential Property Market Report 2018|19, past year’s trends are being documented. In the process, the ten most important locations in Germany were examined on their market situation, their demographic development, infrastructure, as well as their investment perspective on the housing market. In our overview you’ll see the results for these cities; continuing with the state capital of North Rhine Westphalia, Dusseldorf.
Currently, more than 617,000 people are living in Dusseldorf, which makes it North Rhine-Westphalia’s second biggest city after Cologne and the seventh-biggest city in Germany. As part of the metropolitan regions Rhein-Ruhr and the Rhineland, in which collectively over eleven million inhabitants’ life, Dusseldorf is located in the core of the central European economic area. Also located here is Germanys’ third most frequented airport.
Dusseldorf obtained the city rights in the year 1288. The settlement of numerous associations and administrations of iron and steel producers made this city the “desktop of the Ruhr area” and initiated the development to an international business- and finance centre. Dusseldorf has also got a broadly based educational offer: More than 20 institutions of higher education, among them the Heinrich-Heine university and the University of Applied Sciences, are based here. A focus on art is provided by the Kunstakademie Düsseldorf and the Robert-Schuhmann Musikhochschule.
Today, the city is known in particular for its fashion and trade fairs. Since its founding in the year 1947, the Messe Düsseldorf developed to the most profitable exhibition corporation in Europe, drawing in important international exhibitors regularly with its 23 leading world fairs every year. Also here located are numerous headquarters of acclaimed companies from Germany and the whole world, like from the telecommunication sector, economic, corporate and legal consulting, the manufacturing industry and the advertising sector. After London and Paris, Dusseldorf is also a location for the biggest Japanese community in Europe, which encouraged the settlement of many Japanese corporate groups.
Through its high amount of employers from many different sectors, the state capital has a healthy, diversified economy at its disposal. Jobs grew continuously in previous years: Between 2004 and 2015, more than 60,000 new positions were created. Correspondingly, the unemployment rate declined since 2010 from 9.2 percent to 6.8 percent by January 2019.
Demographics and Housing Market
Dusseldorf regularly leads rankings in regards to living standards. On the Mercer index for example, this city ranks on 6th place of worldwide cities with the highest quality of life. Thus, Dusseldorf grows faster than previously expected: The positive migration balance expresses itself in an average growth of 6,100 inhabitants per year since 2012. According to current predictions, another 45,000 people will move into the city by 2030 and will likely raise the population to 662,000. This corresponds to a strong growth by 7,3 percent, which keeps up demand for living space in the long term.
Rental and purchase prices are developing appropriately: Since 2008, they are in constant growth. Purchase prices for condominiums from all years of construction have increased by 100 percent in these years, while prices for new constructions rose by 110 percent. Depending on the location, these cost in existing properties between 2,245 Euro / sq m and 10,000 Euro / sq m and in new constructions between 3,825 Euro / sq m and 13,900 Euro / sq m. Rental prices developed comparably strong: For existing properties, rents rose by 31 percent and in newly constructed apartments by 32 percent. With that, rents range in existing buildings between 8.30 Euro / sq m and 19.80 Euro / sq m and in new constructions between 10.20 Euro / sq m and 24.60 Euro / sq m. This trend will continue in the long term. The development to smaller households will encourage another push in demand with the continuous population growth. At the moment, the average household size lies at 41,8 sq m. Among all demand groups around 53,000 students form a moderate weight in the housing market.
After strong growth in recent years, the current housing stock in Dusseldorf amounts to 356,661 apartments: Just in 2018, 2,813 apartments have been completed. Since demand increases further, around 4,000 apartments per year will be necessary by 2030. A target for the volume of new constructions, that is met by only 70 percent currently. While doing so, the vacancy rate continuously decreased and lies at 1.5 percent as of yet.
Summary and Outlook
Dusseldorf is the state capital of the most populated federal state in Germany. Thanks to the high living standard, an extraordinary infrastructure as well as a strong economy and purchase power, it is a prosperous location for employers and employees alike. Dusseldorf’s location in Germany’s largest metropolitan region will thus ensure further growth and wealth, be it demographically or economically.
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