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Real estate is becoming more expensive in the bacon belts than in the big cities

Higher job opportunities and better infrastructure attract people from rural regions to metropolises. But the surrounding areas of cities are also becoming increasingly popular with German apartment hunters.

The prices for real estate in the surrounding area have risen more sharply since 2017 than in the metropolises themselves. This was the result of the recently published study “Living in Germany 2020 – Differences between Town and Country”, which was carried out by the Sparda-Banken group in cooperation with the Institut der Deutschen Wirtschaft (IW).

Prices in the surrounding area are rising faster than in the city

On the outskirts of the German capital, for example, prices rose by almost 22 percent, much more than in Berlin itself. Real estate in the Munich area also rose by around 10 percent, which is much more than in the city (6 percent). In Hamburg, Stuttgart and Cologne there was also a greater price increase in the rural periphery than in the metropolises themselves. Nevertheless, the prices of residential properties in the bacon belts are on average still 55 percent lower than in the associated cities. Frankfurt, Düsseldorf, Augsburg and Mainz were the only ones of the twelve cities examined in which prices in the city rose faster than in the surrounding area.

Families move to the surrounding area for more living space

While most people pay attention to the price and the infrastructure when choosing where to live, families in particular attach great importance to having enough space in their home. According to IW real estate expert Michael Voigtländer, these tend to move more towards the peripheral rural areas: “If you are looking for more living space for your family, you go out of the big cities and into the surrounding area,” explains the expert in a virtual press conference on the subject. Because, according to the research of the study authors, the average living space in the cities is only around 86 square meters, while the living space in the urban area measures an average of 120 square meters.

Commuter balance is increasing

As a result, the urban area is becoming increasingly popular with commuters. Because in addition to the lower price level, they are now being lured to the rural periphery by more living space. The study “Living in Germany 2019” has shown that around 78 percent of the employees surveyed would be willing to commute up to 30 km between their place of residence and work. Florian Rentsch, Chairman of the Sparda-Banken-Gruppe, sees an urgent need for political action in the increasing balance of commuters: “This gives rise to a clear mandate to politicians to also expand the infrastructure in the surrounding area and adapt the periphery of large cities to these changes”, the expert emphasizes in the virtual press conference.

Real estate demand is unaffected by the corona crisis

Even in times of the Corona crisis, real estate is proving to be a safe investment, as an IW report states: “The prices are just as unbroken as the demand for residential property itself,” according to an IW report on the study. Even more: Since the beginning of the crisis in March 2020, the demand for the purchase of single-family houses has even risen sharply and the interest in rental apartments can be equated to the level before the crisis. While tenants and buyers are largely unimpressed, according to reports, sellers are more likely to be those who show reluctance. The real estate advertisements are still below the level of 2019.

The desire for condominiums is increasing

According to the study results, the development of residential property prices is hardly influenced by the Corona crisis. Looking at the past year and a half, rents have risen by around four percent, and purchase prices by almost 15 percent. According to Florian Rentsch, this indicates that the salespeople are looking forward to the economic development with a positive feeling. At the same time, the increasing demand for condominiums emphasizes the “desire for more security, quality of life and property” that people have developed in the course of the crisis. And, according to Rentsch, the long-term low interest rates also contribute to the rise in demand for residential property.

Image Sources: HQuality / Shutterstock.com

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