Bad news for home buyers: residential real estate rose again in the first quarter of 2020. Prices rose especially in large cities – but houses are also becoming increasingly expensive in rural areas.
Flats and houses in Germany continued to rise sharply at the beginning of the year. The prices for residential real estate (house price index) were on average 6.8 percent higher in the first quarter than in the same period last year, the Federal Statistical Office announced on Thursday. Real estate buyers had to pay more money both in the city and in the country.
In the seven largest metropolises – Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf – the prices for single and two-family houses shot up on average by 9.5 percent. Condominiums rose by 7.4 percent within a year, according to the Wiesbaden statisticians.
Prices are also increasing in rural areas
In the other major cities with a population of 100,000 or more, house prices rose by 8.3 percent and those for condominiums by 9.3 percent. Residential real estate also became more expensive in sparsely populated rural areas: there, the prices for houses rose by 6.1 percent and for apartments by 4.9 percent.
The real estate markets in Germany have been booming for around ten years. The long period of strong economic activity, rising incomes and housing shortages in cities are driving prices up. In addition, low interest rates make real estate financing cheap.