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REVEALED: The German cities where property prices are soaring

Property portal Immoscout24 is forecasting rising house prices in five of Germany's major cities, with prices in Berlin expected to outpace other areas.

Berlin skyline
Berlin's TV tower rises above a historic block of flats and a new-build development. Photo: picture alliance/dpa/dpa-Zentralbild | Jens Kalaene

According to Immoscout24’s latest research, the capital Berlin could see both new-build and existing property prices soar by 13 percent over the next 12 months.

On a national level, the cost of buying an existing property is set to rise by 11.3 percent, while new-build developments could rise by around nine percent. This is due to consistently high demand for property in Germany, researchers revealed.

In contrast, two of Germany’s other major cities – Frankfurt and Munich – have much more modest growth forecasts. In Frankfurt, prices are expected to rise by around five percent for both new and existing apartments over the next twelve months, while in Munich newly built apartments could see an increase of only 2.5 percent, while the price of existing properties is expected to rise by six percent.

The stagnating growth in the property market is likely down to the fact that prices are already high in these areas, the property experts said.

According to Immoscout24, an apartment in Frankfurt cost an average of €5,635 per square metre in the third quarter of 2021 – a figure only exceeded by the prices in Munich, which came in at €7,742 per square metre. In Berlin, on the other hand, buyers were expected to shell out €4,664 per square metre for an apartment. In Cologne, the cheapest of the five, the average apartment costs €4,196 per square metre.

That means that for an average 80 square metre flat in Frankfurt, you’ll likely be looking at an asking price of around €450,000, compared to €373,120 for the same size property in Berlin. 

Other experts have also forecasted slower growth in expensive cities like Frankfurt. Last week, Swiss bank UBS claimed that the Hessian city’s real estate market had the highest risk of a price bubble of all the cities examined worldwide.

This is partly due to to recent dramatic increases in real estate prices. While rents in Frankfurt have increased by around three percent each year since 2016, property prices have jumped by 10 percent annually over the past five years. Meanwhile, the influx of new residents in the banking city came to a standstill in 2020. 

With demand still high and interest rates low, real estate experts don’t expect a downturn in prices anytime soon – but they also don’t expect the rapid increase in prices to continue indefinitely.

READ ALSO: Why Frankfurt could have the biggest housing bubble in the world

Property prices up 63 percent since 2016

Within five years, the asking prices for new-built flats has gone up by 59 percent across the country, while the price of existing properties has risen by 63 percent – though the steep increases are showing signs of tapering off slightly.

In Immoscout24’s survey of property listings on its search portal, the nationwide average asking price was 4.2 percent higher than in second quarter of the year. The average price per square meter was €2,513, which equates to an asking price of €201,000 on an 80-square-metre apartment. 

In the previous quarter, prices increased by 4.4 percent, suggesting that the rapid growth is slowly somewhat. Nevertheless, buyers in the third quarter of 2021 still have to stump up €77,354 more for an 80-square-metre apartment than they did in late 2016. 

The chat below shows the rise in property prices in the five major German cities between 2016 and 2021.

chart showing rising property prices in Germany
Photo: ImmoScout24


Meanwhile, the prices for newly built apartments rose even more in the third quarter than the prices for existing apartments. This type of property is now 4.7 percent more expensive than it was in the second quarter, which experts believe is due to higher construction and completion costs.

“The high demand for properties to buy and the increased costs in the construction industry continues to drive prices up,” said Dr Thomas Schroeter, Managing Director of ImmoScout24.

“The price trend for new flats for sale is currently above the inflation rate, especially in Hamburg, Berlin and Cologne. By contrast, the ImmoScout24 WohnBarometer shows lower price increases for existing flats and new build houses in most other metropolitan areas.” 

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REVEALED: The everyday products getting less expensive in Germany

Inflation rates are soaring in Germany - but the jump in prices hasn't affected all consumer goods. Here are a few of the thing that have actually become cheaper in recent months.

REVEALED: The everyday products getting less expensive in Germany

The cost of living is rising at an alarming pace. In April, the inflation rate in Germany hit a stunning 7.4 percent – the highest it’s been in more than 40 years.

In real terms, that means that many people will be getting poorer year by year, unless they’re lucky enough to have got a stellar pay rise at work. 

When you dig down into the nitty gritty of the price rises though, the cost hikes are quite unevenly spread across different goods and services. 

The Local has reported regularly on the dizzying rise in the cost of fuel and energy, as well as the food items – like milk and fresh meat – that are getting more expensive by the week.

READ ALSO: What to know about the latest price hikes in German supermarkets

In April, energy prices rose by 35.3 percent, while prices for heating oil almost doubled. Consumers also had to pay significantly more for fuel (38.5 per cent) and natural gas (47.5 per cent).

Meanwhile, the weekly grocery shop has also gone up in price, with food costs on average 8.6 percent more expensive than in April last year. Edible fats and oils (27.3 percent) and meat products (11.8 percent) were the items that went up most steeply. 

But not everything is going up in price so dramatically, and some everyday items have even got cheaper over the past few years.

Here’s what consumers in Germany are saving money on today compared to last year.

Digital services and software

Some of the biggest drops in prices over the past year have been in the online and digital sectors, which is great news for anyone looking to pick up a new entertainment system or a new Wifi contract for their home. 

According to the Federal Office of Statistics (Destasis), computer operating systems and other types of software saw the biggest drop in price between April 2021 and April 2022. In fact, people purchasing a software subscription or operating system this spring are likely to have paid around 14.3 percent less than customers who purchased the same software last year.

Destatis also noted that Wifi and internet services have become cheaper in recent months. Since April 2021, the cost of “wireless telecommunications services” (otherwise known as Wifi) has decreased by 2.4 percent, while “access to online services has internet” is 0.8 percent cheaper.

Anyone’s who’s been saving up for a new TV, DVD players or satellite dish will also be pleased to discover that these products currently cost around one percent less than they did in April last year. 

Other electronic devices such as headphones, headsets, e-book readers and digital picture frames fell in price by 1.3 percent between March 2021 and March 2022. Renting videos or DVDs became 0.8 per cent cheaper over the same period.


Wine and sweet treats

While it’s true that most of the weekly grocery shop has gone up in price, some surprising items are actually cheaper now than they were a year ago.

In fact, you can get a romantic dinner for two today for less than you could a year ago, since a plate of seafood is 1.6 percent cheaper and a bottle of wine is 0.8 percent cheaper. Home bakers can also enjoy things like puff pastry and baking mixes for less.

People with a sweet tooth seem to be the biggest winners this year: they can now enjoy a bar of chocolate for less, since the price of chocolate has dipped by three percent since last April, and also make savings of 2.3 percent on any artificial sweeteners they buy. 

Milk and white chocolate bars on display in Berlin.

Milk and white chocolate bars on display in Berlin. Photo: picture alliance/dpa/dpa-Zentralbild | Monika Skolimowska

The other treat that is getting cheaper is ice cream. Just in time for summer, the cost of your ice-cream sundae or Eiskugel in Waffel (ice cream in a cone) has dropped by one percent. 

OK, it may only be a few cents lower, but we still think it’s a good reason not to feel guilty about treating to yourself to an ice cream on a sunny day. 

READ ALSO: German consumers to be hit by further price hikes in supermarkets

Household appliances

Though many household expenses have gone up this year, a few common household goods are currently bucking the trend. 

For soup and smoothie addicts, a staple appliance has decreased in price over the past twelve months. In fact, buying an electric mixer, food processor or blender will set you back 2.8 percent less this year than in April 2021.

Prices for electric irons (-0.5 percent), hoovers (-0.8 percent) and “other large household appliances” (-1.2 percent), which includes water softeners, sewing machines and safes, have also gone down.

READ ALSO: The products getting more expensive and harder to find in Germany

Home and contents insurance

At a time when people have been spending more time at home due to Covid-19, the cost of home-related insurance has gone down.

According to Destasis, the price of “insurance services connected with the dwelling”, which means home and contents insurance, has gone down by around 1.8 percent year on year. 

Glasses and contact lenses

Glasses and contact lenses can be a big expense for anyone who needs them, so people with less-than-perfect eyesight will be pleased to know that the price of both of these has gone down slightly in the past year.

As of April 2022, the price of glasses and contact lenses has gone down by around 1.8 percent on average. 

Designers sunglasses at an auction house in Cologne

Designers sunglasses at an auction house in Cologne. Photo: picture alliance/dpa | Oliver Berg

Clothes and shoes have also been trending downwards over the course of this year: back in February, women’s clothes were around 3.3 percent cheaper than they were in February 2021, while men’s clothes had dropped 0.7 percent in price.

Meanwhile, shoes would have set you back around 0.7 percent less on average, with women’s shoes once again showing the steepest decrease at minus 2.9 percent.

Children were the only demographic to buck this trend. In fact, children’s clothes had gone up in price by 1.6 percent in February and children’s shoes were up by 1.4 percent. 

READ ALSO: OPINION: Why Germany’s energy relief payouts are no fix for inadequate social security