Study: Rents continue to rise, purchase prices remain stable
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The IW Housing Index analyses the development of purchase and rental prices for residential property in Germany on a quarterly basis. The IW Institute assumes that demand is differentiated by flat size due to socio-demographic changes.
Purchase prices for residential property stagnated in the first quarter of 2024. The IW Housing Index shows unchanged values for condominiums and only slight price declines of 0.1 per cent for detached and semi-detached houses compared to the previous quarter. Compared to the same quarter of the previous year, the price declines are more pronounced. They amount to 3.6 per cent for condominiums and 4.0 per cent for detached and semi-detached houses.
In terms of rents, the index shows a strong increase in a historical comparison. Advertised new contract rents rose by 5.3 per cent compared to the same quarter of the previous year. A comparison with the previous quarter also shows significant momentum with an increase of 1.5 per cent. The IW Institute anticipates a possible further intensification of the shortage on the rental housing market.
Overall, there are clear regional differences: outside the top 7 cities, there are signs of a recovery in purchase prices. A moderate increase in advertised purchase prices can be observed in the other major cities and in rural districts. Rents are rising sharply in all region types, particularly in the major cities and their surrounding areas.
The strongest rental price momentum is evident in Berlin, with an increase of 6.0 per cent compared to the previous quarter. In contrast, a further downward trend can be observed in purchase prices in high-priced locations. The decline in Munich, for example, was 2.4 per cent. In mid-priced cities, on the other hand, purchase prices are stagnating or rising moderately.
The greatest influence on the market development of rents and purchase prices is currently the strong immigration to Germany, especially to the urban centres, and the dominance of small households in the demand for housing.
(Photo: © Modestas, Pixabay)