Real estate prices are growing steadily despite the crisis – purchase prices have risen by almost 100 percent since 2012
Real estate has been a popular investment for many years – it offers attractive returns with relatively low risk. The real estate industry was able to live up to this reputation even during the Corona crisis. While other asset classes suffered heavy losses, the real estate market held out.
Real estate prices only know the way up
The German real estate market has been growing steadily for over a decade, and the Corona crisis was also barely able to contain the rising real estate prices. Due to its stability and security against crises, the property is the most popular investment among investors and it is not without reason that it is also called concrete gold.
Other capital investments such as shares fell sharply in the course of the crisis, causing investors to suffer heavy losses. Real estate prices, on the other hand, move steadily upwards even in times of crisis. This applies to both urban residential property and rural property.
Around 100 percent price increase within eight years
A study by Empirica showed that the purchase prices for condominiums in certain regions have risen by around double since 2012.
If you compare the square meter price in major German cities in 2012 with that of the second quarter of 2020, you can see an increase of almost 100 percent. While the square meter still cost 1,500 euros in 2012, today 2,921 euros have to be paid, according to figures from the Empirica study, which are available to the “Kryptoszene” portal.
Real estate defies the crisis – condominiums since 2015 with a price increase of over 50 percent
But the price increases in the recent past are also impressive: in terms of the purchase price for condominiums, the Bavarian capital Munich will continue to establish itself as the all-time leader in 2020. Since the third quarter of 2019, property prices here have risen by 6.1 percent, unaffected by the crisis. A proud price increase has also been observed in the past five years: since 2015, the square meter in Munich has increased by 53.7 percent, as Empirica determined according to the “Kryptoszene”.
In Frankfurt, Berlin and Potsdam, the square meter rose even steeper in relation to the same period. In the past five years, the square meter has become 93.5 percent more expensive in Potsdam and 83.2 percent more in Frankfurt am Main. Homeownership in the federal capital Berlin has become 72.3 percent more expensive since 2015.
But real estate prices in Augsburg (69.1 percent), Stuttgart (57.7 percent), Erlangen (55.9 percent), Düsseldorf (53.5 percent) and Hamburg (52.1 percent) have also risen over the past five years and grew by more than 50 percent despite the recent crisis.
Big winner: real estate in densely populated districts
An interesting result of the study also shows the growth rates of the individual location categories from the fourth quarter of 2019 to the second quarter of 2020. For example, it was not real estate prices in the metropolises that rose the most during this period, but those in “more densely populated rural areas”, followed by Large cities with more than 100,000 inhabitants.
Compared to the same quarter of the previous year, real estate costs in metropolises rose by around 6.5 percent, in large cities by more than 7 percent and in densely populated rural areas by almost 9 percent.
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