The recently published report by ACCENTRO Real Estate AG shows that Munich is still undisputedly the most expensive city to live in in Germany when it comes to condominiums. In addition, average sales, sales and prices of residential properties in Germany have increased significantly compared to 2018.
Structure of the ACCENTRO report
ACCENTRO Real Estate AG – a listed real estate company and market leader in residential property privatization – has published the ACCENTRO Homeownership Report every year since 2008. This year the report was written for the first time in cooperation with the Institut der Deutschen Wirtschaft (IW). All residential property transactions in all 82 major German cities with a population of more than 100,000 people were considered. According to its own information, the report thus covers around 85 percent of the entire German market. The report, which was published for the 13th time this year, is based on data from the relevant municipal expert committees.
The report, which is around 200 pages long, is divided into two parts: In the first part of the report, a ranking is created in which the residential property markets of all major German cities are rated based on various criteria. Assessment features are, for example, the number of residential property sales achieved and the transaction volume.
In the second part of the analysis, the data obtained from each major city – i.e. sales, market prices and sales figures – are presented in various overviews.
Sales of condominiums are increasing
Overall, the results of the study show a significant increase in sales in cities. According to ACCENTRO, a total value of 35 billion euros was achieved in 2019 through residential property transactions alone; in 2018 it was around 3.37 billion euros less. Berlin generated the largest turnover – certainly also because of its size. The German capital generated a turnover of 6.25 billion euros in 2019, which corresponds to around a fifth of the total turnover. Munich is in second place in the sales rankings and, at 5.55 billion euros, made up around 15.86 percent of total sales. This is followed by Hamburg, Frankfurt am Main, Cologne, Düsseldorf and Stuttgart.
Sales figures in major Bavarian cities
According to a press release by ACCENTRO, a total of 20,131 residential properties were sold in major Bavarian cities in 2019, 753 more than in 2018. While sales figures in Munich were still down in 2018 compared to 2017, sales in the Bavarian capital increased again in 2019. This year, 10,373 condominiums were traded, which corresponds to an increase of 527 sales. Another major Bavarian city saw the greatest increase: Regensburg was able to increase its sales figures by 31.51 percent to 1,273 apartments.
Munich remains the most expensive city in Germany
In 2019, Munich again leads the ranking of the most expensive cities in Germany. The real estate prices for condominiums in Munich increased by 10.65 percent per property compared to the previous year. The Bavarian capital is setting a new record: With an average price of 535,043 euros per apartment, Munich is the first city in Germany in which the average value of a condominium is greater than 500,000 euros. “With this, Munich is once again underlining its position as an attractive investment location,” explains Lars Schriewer, Chairman of ACCENTRO Real Estate AG.
The recently published UBS Global Real Estate Bubble Index of the major Swiss bank UBS describes similar developments in relation to the Bavarian city. For example, the scientists calculate an index of 2.35 for Munich; according to UBS, at more than 1.5 points there is a risk of a price bubble. According to the ACCENTRO report, the Munich residential real estate market generated sales of 5.55 billion euros last year, which is only 700 million euros behind Berlin; In 2018, the gap was 1.31 billion euros. This reduced the Munich sales gap compared to the German capital by almost half.
Sales of new buildings are increasing
Apart from Fürth, real estate prices have also increased in all other major Bavarian cities compared to the previous year. The greatest increase, however, was recorded by Würzburg; Here residential property prices rose by 18.63 percent compared to 2018. When it comes to the sale of new apartments, Würzburg has increased its sales figures the most compared to 2018. With an increase in the number of new buildings sold by 170.13 percent, Würzburg occupies eighth place in the ranking of Bavarian cities. Most of the new buildings in Bavaria were sold in Munich (2,826), followed by Nuremberg (616), Regensburg (594) and Ingolstadt (327) at some distance. Fürth (-43.35 percent), Ingolstadt (-33.94 percent) and Nuremberg (-7.51 percent) were the only cities in Bavaria in 2019 that were unable to post positive developments in sales of new apartments.
Prof. Dr. Michael Voigtländer, project manager of the finance and real estate markets departments of the IW, emphasizes the great importance of new buildings in the press release published by ACCENTRO in October. According to the expert, these help to balance the residential real estate market in the popular cities, because the top 7 locations Munich, Nuremberg, Regensburg, Ingolstadt, Erlangen, Augsburg, Fürth and Würzburg as well as other swarm cities have been through strong in the past decade Immigration from home and abroad has grown enormously.
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