German apartments: a price refund from your neighbor?

National In 2023, the media reported record declines in German housing prices. Now the price situation at our neighbor's is starting to move in a different direction.

German the housing market arouses more interest in us than, for example, the Italian one or French. It is a question of geographical distance and connections, among other things. economic situation in Poland and Germany. It is hardly surprising that the national media in 2023 reported record-breaking drops in German housing prices and houses. Now, prices of square footage in Germany are less often discussed here. Meanwhile, the situation beyond the western border is still interesting, and the price trend is reversing. Interesting data is analyzed by experts from the RynekPierwotny.pl portal.

Native the media, when reporting on the price drops for German square footage, unfortunately rarely emphasized distinction between newer and older buildings . It is therefore worth paying attention attention to the chart below presenting changes in the offer prices of flats and houses and rent rates in Germany for 20 years (2005 - 2025). Chart based on Empirica Regio data includes newer houses and flats put into use in the previous ten years (new buildings) and all houses/flats residential regardless of the year of construction (housing stock).

Such a division age is important because the data shows that newer German apartments in during the recession they did not get cheaper. However, a clear depreciation was visible on market for older premises. When it comes to German houses, we see a similar difference, which is related to the large increase in energy prices and the existing class system energy. Newer houses have become much cheaper during the recent recession less than the older buildings. What's more, there were already quite visible significant increases in the asking prices of newer German properties housing (houses and premises). The beginning of 2025 brought the first growth symptoms for the entire housing and residential market.

About the change of trend The GREIX index based on transaction data also tells us about the neighbor's price situation. The mentioned index is of a hedonic nature - similarly to the previously presented ones. Empirica Regio information. This means that the impact of changes is compensated on an ongoing basis in the studied group of apartments (e.g. appearance in offers or files notarial deeds of a larger percentage of premises from the premium segment). After appropriate analysis of information from notaries, experts preparing the GREIX index calculated the following annual changes in the transaction prices of German apartments:

• Q1 2023 - a decrease of 8.4% compared to the same quarter of the previous year
• Q2 2023 - 10.9% decrease
• Q3 2023 - 11.2% decrease
• Q4 2023 - decrease by 7.3%
• Q1 2024 - 4.8% decrease
• Q2 2024 - decrease by 2.3%
• Q3 2024 - increase by 0.8%
• Q4 2024 - increase by 1.9%
• Q1 2025 - increase by 3.2% (preliminary data excluding Hamburg and Munich)

Let's remember that the above data concerns eight German cities of major market importance (Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Leipzig, Munich, Stuttgart). On a scale individual cities, the GREIX index from Q1 2025 indicates annual increases housing prices ranging from 1.8% (Frankfurt) to even 8.9% (Leipzig). taking into account more locations (21 cities and regions), the annual reading GREIX index is (+3.1%). It is worth adding, however, that for now these are preliminary results for Q1 2025

RynekPierwotny.pl experts also pay attention to information published by Destatis. The German equivalent of the Central Statistical Office states that in the first quarters of each year, the number of new premises and houses with permits for construction looked like this:

• Q1 2017 - 70,232 flats and houses
• Q1 2018 - 69,152
• Q1 2019 - 67,034
• Q1 2020 - 70,963
• Q1 2021 - 85,230
• Q1 2022 - 82,305
• Q1 2023 - 58,972
• Q1 2024 - 44 292
• Q1 2025 - 46,096 apartments and houses

As you can see, the current The activity of residential investors from Germany is significantly lower the level from 2017 - 2020, which was then considered insufficient. Successive German governments set themselves targets of 350,000, 375,000, and then 400,000 new apartments and houses built every year as a way to alleviating the housing deficit visible in large cities.

Practice has shown However, achieving the lowest of the adopted goals (350,000) was impossible - even in times of much better economic conditions than the present one. No It is therefore surprising that in the recently signed coalition agreement between the CDU, CSU and SPD there was a mention of a slower introduction of a more restrictive standard energy efficiency of buildings (EH40). Transitional maintenance of requirements resulting from the older EH55 standard is seen as a step to strengthen German housing market from the supply side.

Source: