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PROPERTY

German property prices rise at highest rate in two decades

The cost of buying a home has jumped significantly in the past year in Germany, with major cities and rural areas seeing the biggest rise in prices.

Property prices German
A row of houses in Munster, Germany. Photo: picture alliance/dpa/LBS West | LBS West

According to the latest data from the Federal Office of Statistics (Destatis), residential property prices in Germany rose by an average of 12.2 percent between the final quarter of 2020 and the final quarter of 2021. 

This is the biggest price increase in residential property prices in more than two decades.

It followed two previous quarters of strong growth, with prices springing up by 12 percent in Q3 and by 10.8 percent in Q2 compared to the previous year’s figures. From Q3 to Q4, property prices went up by just over three percent on average in Germany.

In the annual average for 2021, prices for residential property in Germany rose by 11 percent overall compared to 2020 – almost double the average growth of 7.8 percent in 2020. 

The latest statistics suggest that Germany is seeing a renewed boom in its housing market after the pandemic, which could reflect the low interest rates on mortgages and the impetus to invest savings in property to prevent them being eroded by inflation.

READ ALSO: EXPLAINED: The hidden costs of buying a house in Germany

Rural areas see highest growth

With a culture of remote working taking hold in Germany since the pandemic struck in 2020, prices in rural areas showed the strongest growth of all last year.

According to Destatis, the cost of buying a detached or semi-detached house in less populated rural regions rose by 15.9 percent against the previous year, while flat prices went up 13.2 percent. In more densely populated rural districts, prices for detached and semi-detached houses rose by 14.5 percent and prices for condominiums went up by 11.2 percent.

This trend could continue as more and more people consider swapping their urban lifestyle for a gentler pace of life in the countryside.

Average property price increases

Average annual price increases in the German property market from 2000-2021. Source: Destatis

A recent survey by property search portal ImmoScout24 revealed that two-thirds of Germans had thought about moving to the country in the past few years, with most attracted by the idea of being close to nature and being able to have their own garden. 

Since the start of the pandemic, demand for family homes out in nature has gone up by 30 percent, ImmoScout24 revealed. The demand was particularly strong in the green belt areas around Berlin and Hamburg. 

Significant price hikes in major cities

In a reflection of the fiercely competitive rental market, property prices in Germany’s seven major metropoles also rose steeply in 2021. 

Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf all saw above-average price increases in Q4, with prices for detached and semi-detached houses rising by 12.8 percent and prices for flats by 12.7 percent year-on-year.

A small consolation for potential big-city buyers: the price hikes in the metropoles appear to be tapering off a bit.

Between the third and fourth quarter, prices for detached and semi-detached houses in metropolitan areas rose by 1.4 percent, while flat prices rose by just 0.7 percent. This is a marked change to the rate of growth just a quarter earlier, when prices for houses jumped by 3.5 percent and prices for flats had jumped by 3.8 percent compared to Q2. 

Currently, according to property portal Immowelt, houses in Germany cost an average of around €2,800 per square metre, while flats cost an average of around €3,200 per square metre, though there are strong regional differences.

Saxony, for example, remains a highly affordable place to buy a starter home, while in Bavaria and its capital, Munich, buyers can expect some of the highest property prices in the country. 

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LIVING IN GERMANY

Living in Germany: Shorter work weeks, €9 tours and hitzefrei

In our weekly roundup for Germany we look at the debates around shortening the work week, tours around the country and what happens when it gets too hot.

Living in Germany: Shorter work weeks, €9 tours and hitzefrei

Is it possible to have a good work-life balance in Germany?

It’s something that most of us struggle with – how do you balance your job with having a fulfilling private life? We don’t have the answer to that unfortunately, but our story on the German debate on weekly working hours really made us think. Some other countries, such as Belgium and Iceland have taken steps towards offering employees a shorter working week. Meanwhile, the UK is carrying out a massive trial on a four-day week, with 70 companies trying out shorter working hours for six months. In Germany, things haven’t progressed that far, but it is encouraging to see that some companies are thinking about changing how we work. For instance, the Hamburg-based software firm Knowhere will let employees switch to a four-day, 32-hour work week from August for the same salary, and Vereda, a marketing firm in Munster, has already put in place the same system. 

As the world of work changes and we all strive to achieve a better balance, do you think Germany should push for a shorter working week? It certainly would be nice to celebrate Feierabend that little bit earlier. Let us know your thoughts: [email protected]

Tweet of the week

We love the idea of this tour of Germany with the €9 ticket. We’re still trying to think up ideas to add to the list…

Where is this?

To mark the summer solstice on June 21st, visitors gathered at the ring shrine (Ringheiligtum) of Pömmelte in Saxony-Anhalt.

Photo: DPA/Klaus-Dietmar Gabbert

To mark the summer solstice on June 21st, visitors gathered at the ring shrine (Ringheiligtum) of Pömmelte in Saxony-Anhalt. The historical site dates back to the end of the Stone Age and the beginning of the Bronze Age. According to experts, our ancestors celebrated seasonal festivals here.

Did you know?

With summer in full swing, temperatures have been rising. But is it ever too hot to go to work (or school) in Germany? Actually, that can happen. As you’ll no doubt be aware, most homes and many public buildings in Germany don’t actually have air conditioning unlike other hot countries. Of course, Germany doesn’t really need air conditioning for most of the year, but in these summer months it wouldn’t go amiss. 

So if things do get unbearable, German schools and workplaces can declare hitzefrei (literally, heat free), and that means pupils or employees can take the rest of the day off due to excessive heat. However, as you’d expect there’s a few rules around this, which we’ve detailed in this article written in the heatwave of summer 2019. 

READ ALSO: 8 of the coolest places in Germany to visit on hot summer days

If you are having to go to a workplace, your employer should make sure that there are no health hazards. That could mean buying a fan for the office, blinds or giving a special clothing allowance if you’re having to work outside. The decision on getting a day off generally has to be a decision taken by your boss. On very hot days, you’ll sometimes find that cafes or shops close and leave a sign on the door that says: hitzefrei! And the rules on overheated classrooms and when to send kids home depends on the state legislation. Wherever you are during the summer we recommend you stay hydrated, get that sun cream on and wear a hat. 

Thanks for reading,

Rachel and Imogen @ The Local Germany 

This article is also sent out as a weekly newsletter just to members every Saturday. To sign up and get it straight into your inbox just go to your newsletter preferences.

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