Corona on the housing market: Housing prices continue to rise

The corona crisis has economic consequences and the real estate industry is also afraid of the effects. However, the prices on the market are initially stable.

How does Corona affect house prices?

The corona pandemic resulted in a Germany-wide shutdown. In the past few weeks there have been various theories as to how far the corona crisis will affect the real estate industry and thus property prices: Opinions differ. While some experts expect losses in value and a slump in the industry, others assume that the real estate industry will survive the crisis relatively unaffected. In its latest quarterly report for the first quarter of 2020, the Hamburg real estate research and analysis company F + B therefore investigated the question of how Corona influences house prices. To do this, F + B analyzed the movements on the real estate market during calendar weeks ten to 16 using the F + B Housing Index, and the shutdown began across Germany in the twelfth calendar week. The numbers before and after the twelfth week therefore serve as a basis for assessment and the result is surprising: nationwide house prices even increased by 2.6 index points in the first quarter of 2020.

Housing supply for new rental apartments is falling

The supply of living space decreased for both rental apartments and condominiums in the period under review. F + B’s analysis shows that there were around 38 percent fewer rental property advertisements nationwide in calendar week 15 than there were in calendar week ten, although this development was subject to fluctuations. The numbers recovered in the 16th week of the calendar.

Even in Germany’s top 7 locations, the most serious cut was observed in the 15th calendar week with around 40 percent fewer rental apartment advertisements; in the big cities, the drop in supply was once again more severe, but the numbers also recovered here.

Rental prices are stable

Average rents in the top 7 cities fell slightly by just under three percent from the tenth to the 16th week of the week, but nationwide average rents for newly offered apartments even increased by 1.3 index points in these six weeks. Dr. Bernd Leutner, Managing Director at F + B, concludes from the reduced offer and the stable rents: “Landlords are more likely to forego immediate letting rather than immediately anticipating an upcoming negative economic development to reduce the rent.” Instead of lowering the rent and Properties now for rent at low prices, landlords prefer to wait to rent their apartments at a later date at better conditions.

In addition, the chances of profit for landlords increasing again after a long stagnation phase increase again. New lease prices rose an average of 0.6 percent in the first quarter of 2020 compared to the fourth quarter of 2019.

Housing supply for condominiums is also falling

As with rental apartments, the supply of condominiums on the German market decreased over the analyzed period, F + B reports in its quarterly report of “significant corona effects” in the development of condominiums. Nationwide, the supply of condominiums decreased significantly despite fluctuations by the end of the 16th calendar week, in the top 7 cities even more than the national average.

Purchase prices for condominiums continue to rise despite Corona

However, the purchase prices of the condominiums continued to move steadily. Across Germany, the purchase prices rose an average of 2.6 index points within the weeks under review and rose by almost 100 euros per square meter per month.

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According to Leutner, the industry should not panic based on the latest figures. He points out that the real estate market is reacting more slowly than the stock markets and political or economic events are therefore not immediately reflected in the real estate market.

Image sources: IvanMichailovich /

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