German properties remain focus of investor interest in 2016
- Housing prices rise by 6.6 % on average for the year
- Commercial property prices up by 6.0 %
The upward trajectory for prices in the German real estate market continued unabated in 2016, too. Calculated on the basis of real transaction data, the vdp property price index rose by 6.5 % on average for the year (2015: + 5.0 %). Prices for residential properties went up by 6.6 % (2015: + 5.9 %) and for commercial properties by 6.0 % (2015: + 2.0 %).
“Although construction activity in the German real estate market has been stepped up, there are still no signs of easing on the demand side,” said Jens Tolckmitt, Chief Executive Officer of the Association of German Pfandbrief Banks (vdp). "Prices have seen a further sharp increase, notably for condominiums."
The commercial property market presents a similar picture. Investment in real estate still seems to be fueled by a lack of suitable alternative investment opportunities, although also by sound user markets and stable economic developments. “It has to be said that price developments are and will stay dynamic as long as fundamental drivers such as the present interest rate level and a lack of alternative investments remain in place,” Tolckmitt went on to explain.
For details on how the individual market segments developed, and for all index data on the individual vdp property price indices (2003 - 2016) including charts and tables, please refer to the attached publication.