Top 10 Red Rock Investment Locations in Market Report: Frankfurt

A strong economy with ongoing growth: In the Residential Property Market Report, the economic development of real estate markets in Germany between 2018 and 2019 has been analysed.

Because of its skyline, Frankfurt is often referred to as "Mainhattan". Source: pexels

In the latest Red Rock Investment Residential Property Market Report 2018|19, past year’s trends are 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 Hesse’s metropolis: Frankfurt am Main.

Frankfurt in general and property market

With around 751,000 inhabitants, Frankfurt is the fifth largest city in Germany in terms of population. Due to the extremely strong economic structure, the population has grown on average by 11,200 people per year since 2011. Because of the influx, already 6,700 apartments are missing each year – only 52 percent of demand were satisfied. At 0.5 percent, the vacancy rate is correspondingly low. In the course of Brexit, the housing offer will tighten even more. For example, when jobs are relocated from London to Frankfurt.

In popular inner-city locations rents amount up to between 10 and 14 euros per square metre, whereas flats cost 13 to 17 euros per square meter when they are rented for the first time after renovations or new construction. In exceptional prime locations, the square metre in existing buildings costs 25 euros, new construction even up to 30 euros. Therefore, in Germany Frankfurt reports the highest rents after Munich. For condominiums, the average price in the mid-price segment is at 4,900 euros per square metre, while new buildings cost on average 6,550 euros per square metre. Since 2008 purchase prices for residential real estate have risen by 156 percent.

Frankfurt´s economic situation

Frankfurt am Main is considered one of the most important European financial centers and the most important banking city in Germany. With the European Central Bank, the German Federal Bank and the Frankfurt Stock Exchange several financial companies of national and international importance are represented in Frankfurt. In addition, Deutsche Bank, Commerzbank, Goldman Sachs, JP Morgan and the BaFin and EIOPA financial supervisory authorities are also based in Frankfurt am Main.

Frankfurt is also one of the top locations for trade and infrastructure. Frankfurt Airport is the largest airport in Germany. The city also hosts one of the oldest fairs in Germany. The International Motor Show (IAA), the Frankfurt Book Fair and the Music Fair have an excellent international reputation and are considered to be world leaders in their fields. The labour market is correspondingly strong: since 2011, the unemployment rate has fallen from 7.5 to 5.2 percent. Corrispondingly, the purchasing power per inhabitant is on an average of 26,680 euros. After Munich, Frankfurt is the wealthiest city in the Federal Republic of Germany.

Outlook

Since Frankfurt is traded as the new financial capital on the European continent, the metropolis at the river Main will continue to benefit from Brexit in the future. By 2030, a population growth of 8.5 percent is expected, so that demand for housing will remain high. Ranking directly after Munich, the Frankfurt region is the financially strongest region in Germany. All forecasts assume that the excellent infrastructure and the strong economy in Frankfurt am Main will continue to provide an upswing.

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