Q2 2024: Residential real estate prices are stabilizing. Construction activity continues at extremely low levels
Prices continued to increase during the quarter ~0.96% Q/Q , and started to show a positive y/y trend.
“ The prices for condominiums continue to rise, while real estate prices for existing houses and new buildings remain stable with minimal price declines ,” explains Stefan Münter, Co-CEO and board member of Europace, explaining the house price index. “ The bottom has long been reached and we continue to see a clearly high demand for real estate. We expect prices to rise in the coming months and see a slow shift from a buyer’s market to a seller’s market. The feasibility is unlikely to improve and the supply will decrease again in the future. It is therefore essential to keep a close eye on the economic conditions and to react flexibly to changes ,” adds Münter.
Data from Immoscour24 shows average Berlin prices also remained mostly flat during the quarter.
Rent prices also continued to increase during the quarter in Berlin, and nationally, according to Immoscout24
Rents are expected to remain high or even rise further due to tight supply and an exacerbating housing shortage, driven by the current and anticipated low levels of building permits and housing completions.
- From January to May 2024, 71,400 new apartments were approved, 24.0% or 22,600 apartments fewer than in the same period last year.
- According to the Ifo Institute, approximately 210,000 new residential dwellings will be completed in 2024, dropping to around 175,000 in 2025. Including other completions, only about 200,000 housing units will be built in 2025, falling short of the German government’s target of 400,000 units.
The transaction investment volume increased significantly compared to the previous year.
- Across Germany, €3.3 billion was invested in larger residential portfolios (30 residential units or more) in the past six months. This exceeded the half-year result of the previous year by 25%, although the long-term average was undercut by 59%.
