As final 2022, residential properties are costlier | EUROtoday

According to a research, costs for residential properties in Germany have elevated considerably within the first quarter of a research for the primary time in a very long time. From January to March, condominiums elevated by a mean of 1.2 % to the earlier quarter, as may be seen from the investigation of the Cologne (IW) institute, which the Reuters information company offered upfront on Thursday. This is the strongest plus since spring 2022. One and two -family homes even value 2.3 % extra – the strongest enhance in three years. Compared to the earlier 12 months, the worth surcharge right here was 2.9 %.

“This development indicates a certain stabilization of the market,” write the IW economists Pekka Sagner and Michael Voigtländer. “Easily sunken financing costs should play a role as well as the continued demand for residential property – especially in stock.” The buy costs in Essen (plus 6.3 %) and Leipzig (plus 5.8 %) rose notably strongly. Cologne is an exception with a slight decline of 0.3 %. In Düsseldorf, Dortmund, Berlin and Stuttgart, costs rose reasonably.

“Nevertheless, it remains to be seen whether this is already a permanent trend reversal,” emphasised the institute. “Many market participants continue to act in a price -sensitive manner, and the economic framework is also affected with uncertainties.” The newest worth actions aren’t a return to the dynamics of earlier growth years.

The researchers see no indicators of leisure on the rental condominium market. In the primary three months of 2025, the provide rents rose by 1.2 % to the earlier quarter. Measured final 12 months, they elevated by 4.3 %, after 4.7 % within the fourth quarter and 5.3 % within the third quarter of 2024. “The lower growth rates follow the slightly weakening wage dynamics as a result of the ongoing economic weakness,” it stated. Nevertheless, the dynamics keep excessive. “The continued lack of available living space meets robust demand, especially in metropolitan areas and economically attractive regions,” emphasised the IW. “Even economic uncertainties have hardly dampened the demand for rental apartments.”

In a 12 months, rents elevated essentially the most in Leipzig (plus 7.7 %), Essen and Frankfurt (plus 6.1 %) and Düsseldorf (plus 5.8 %). Hamburg, Munich and Stuttgart additionally enhance considerably once more with round 4.9 and 4.6 %. After the current nice dynamics, Berlin stays beneath common, in addition to Cologne (3.5 %) and Dortmund (3.7 %).

According to the IW, US President Donald Trump’s commerce coverage – who imposed excessive punitive tariffs on imports – may also affect the German housing market. “Uncertainties in foreign trade are reflected in the labor market and have a dampening of demand, especially in the commercial real estate segment.” New tariffs on central constructing supplies resembling metal and aluminum would make building tasks costlier. At the identical time, there are delays and extra prices within the new constructing as a consequence of persistent provide chain issues. “These effects exacerbate the investment conditions in the new building sector and at the same time increase the pressure on the inventory, which can have a price -stringing effect,” the institute expects.

The elevated uncertainty on the monetary markets results in stronger worth fluctuations and to flee into supposedly protected asset courses – together with German authorities bonds. “In the short term, financing conditions on the real estate market improve,” stated the Cologne researchers. “Against this background, the demand for high -quality residential properties in Germany remains high, including from the international environment.”

Trump’s confrontative commerce coverage additionally contributes to a stronger inflation strain, on which central banks might react with rate of interest will increase. “In the long term, this would increase the financing costs, which would make it difficult to acquire home ownership and investments in housing,” emphasised the IW.