A new study by the HWWI confirms that German housing prices will continue to rise until 2030. Price increases are to be expected especially around Munich and in Heilbronn.
Advancing urbanization is causing housing prices to rise
A study by the Hamburg World Economic Institute, HWWI for short, which is available exclusively to WELT am Sonntag, predicts that prices on the residential property market will continue to rise until 2030. The study was carried out as a result of an order from Postbank. This in turn emphasizes in a press release that the analysis is based on the housing market data before the start of the corona pandemic, but that it is meaningful despite this. The study identifies advancing urbanization as the driving force behind the rising housing prices, which will increase the number of inhabitants in metropolitan areas.
Accordingly, Postbank estimates the market situation on the basis of the HWWI study as follows: “In more than half of the 401 German districts and cities, apartment owners can expect their property to gain in real value by at least 2030.”
The Munich area and medium-sized cities recorded the strongest price increases
The analysts forecast the strongest price increase for the Munich catchment area such as Ebersberg, Landsberg am Lech, Erding, Dachau and Starnberg. For Munich itself an annual price increase of 1.7 percent is expected, for the district of Munich even with two percent. In addition to Upper Bavarian districts, Cloppenburg, Heilbronn and Potsdam are also represented in the top cities with the strongest price developments. According to the HWWI analysis, Heilbronn in Baden-Württemberg is the city with the highest price growth across Germany. Munich and Potsdam are just behind.
In addition to the top districts and cities, the German Big Seven will benefit from the upward trend in the residential property market, reports Postbank in its announcement with reference to the HWWI study. For Munich, Düsseldorf, Cologne and Berlin, the HWWI predicts annual price growth of one to over one percent by 2030. Hamburg, Stuttgart and Frankfurt are estimated to have grown by 0.95 percent, 0.91 percent and 0.8 percent, respectively. Other German cities and districts that are above the one percent growth rate are Heilbronn, Potsdam, Freiburg im Breisgau, Münster, Leipzig, Dresden, Ingolstadt, Mainz, Landshut and Memmingen.
Real estate expert Eva Grundwald explains the reason for the sharp rise in prices outside the metropolises in the Postbank press release: “The high prices in the Big Seven have a deterrent effect on many prospective buyers. Smaller centers are increasingly being considered and are becoming more attractive. “
In eastern Germany, negative price trends are predicted for the majority of the districts.
The head of the Postbank real estate business, Eva Grundwald, is optimistic about the price development on the residential property market. “We see no signs of a bubble that could burst as a result of the crisis. On the contrary: From our point of view, the real estate market is still an anchor of stability ”, she is quoted in the press release. Therefore, she is convinced that the results of the study are still relevant. Only a second shutdown with more serious income losses in the population could change growth expectations. Should it also turn out that the effects of the first shutdown on the income level of citizens are already more serious than currently assumed, this could also result in a different price trend.
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