Real estate portal Immowelt forecasts rising real estate prices
The current situation is not going to change any time soon—the population of cities like Leipzig continues to grow, and the European central bank is sticking to its policy of low interest rates. These are the main drivers behind the continued increase in prices up to as much as €1,000 per square meter by 2020 according to a study from the real estate portal Immowelt. Builders and buyers would be well-advised to make quick decisions now. A 100 m² apartment in Munich, for instance, might cost up to €100,000 more by the end of next year. A comparable apartment in Hamburg could go for €50,000 more. This trend can also be observed in cities such as Leipzig which, according to the real estate agency startup Homeday, saw prices for residential real estate increase by 41.9 percent, enough to rank 3rd in Germany. Homeday also sees the current interest rate trends and Germany’s new Baukindergeld homebuilding subsidy for families with young children as strong incentives for real estate buyers. With demand remaining strong, this will continue to drive prices even higher. Immowelt expects prices to increase by 13 percent on average across Germany. In the 14 largest German cities, prices will increase between five and 15 percent according to the study. The study was based on data about interest rates, local construction prices, inflation statistics, and demographic trends. Independent economic experts such as Tobias Just, professor for real estate economics and the managing director of the International Real Estate Business School (IREBS) of the University of Regensburg note that this rapid rise in prices is a clear indication that real estate is indispensable as an investment tool.