Property prices continue to develop unevenly depending on the region and property type. While prices for condominiums fell by 0.25 per cent for the first time in months, prices for existing detached and semi-detached houses continued to rise.
The development of property prices in Germany is monitored and documented by various institutes. The EPX hedonic is based on transaction data for private property financing from the independent Europace platform. The EPX was developed in 2005 together with the Federal Office for Building and Regional Planning (BBR) and has been compiled on a monthly basis since then. The overall index is made up of data for existing and new buildings as well as for condominiums.
The Europace House Price Index also shows a significant increase in property prices towards the end of 2024 - particularly for existing properties and new detached and semi-detached houses. Only condominiums are showing a slight decline in prices for the first time in months. The price increase is particularly marked in the metropolitan regions, while prices are rising somewhat more slowly in the other regions. According to Europace estimates, demand for property will remain high as long as the situation on the rental market does not ease.
The German Real Estate Index, GREIX, is a relatively new index that documents the development of property prices. The GREIX is a property price index based on the purchase price collections of the expert committees, which contain notarised sales prices. The GREIX provides free access to property price indices for German cities. The project is supervised by IfW Kiel, the Cluster of Excellence ECONtribute and the MacroFinance & MacroHistory Lab.
A new analysis by GREIX concludes that the energy-efficient refurbishment of buildings is worthwhile and is reflected in adequately higher sales prices and rents. A condominium with energy efficiency class A+/A is currently around 650 euros per square metre more expensive than a comparable flat with energy efficiency class D/E. In terms of monthly rents, the price premium is around 0.85 euros per square metre. However, this does not increase the yield, but rather secures the long-term value of the property.
Graphic: © Europace, Berlin, 2024
