If you’re holding your breath for a crash in the German housing market, you might be waiting a while. New figures from the Federal Statistical Office (Destatis) show that house prices in Germany have continued to rise throughout the coronavirus crisis - faster than expected - both in cities and rural areas.
German house prices rose 6,6 percent in second quarter of 2020
Houses and apartments in Germany have become significantly more expensive during the coronavirus crisis - even more so than experts previously predicted. On average, prices for residential real estate in the second quarter of 2020 were 6,6 percent higher than a year earlier, Destatis announced this week. Compared to the previous quarter, the prices for all types of housing increased by two percent.
Back in August, the statisticians had estimated that the year-on-year increase in prices would be closer to 5,6 percent, and the quarterly rise would be around 1,4 percent - meaning that their expectations have been exceeded on both fronts.
The data shows that the cost of buying a house has risen in both urban and rural areas. In the seven largest cities in Germany - Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf - house prices rose by 6,5 percent compared to the second quarter of 2019, while the average selling price of apartments rose by 6,1 percent.
Real estate prices in Germany up 36 percent in five years
In other large cities with more than 100.000 inhabitants, house prices rose even more sharply, hitting an increase of 7,3 percent. Apartments became even more expensive, with selling prices rising by 8,2 percent.
In rural areas, prices also increased, but less strongly: Destatis recorded a 4,8 percent increase in house prices and a 5,9 percent increase in apartment prices. But with the demand for living space reaching record highs in metropolitan areas, driving up real estate prices, an increasing number of prospective buyers are turning to rural regions in search of more affordable properties.
According to Destatis, real estate prices in Germany have risen by more than 36 percent in the past five years - and the increase is continuing, especially in metropolitan areas. However, they did notice a slight dip in the trend when it comes to apartments. The rate of increase for this type of property was 7,9 percent, down from 11 percent in the second quarter of 2018.