German property market 1st quarter 2017: Rise in prices unbroken, current development predominantly driven by commercial market

  • vdp property price index rises by 6.0 percent
  • Residential property prices: + 5.7 percent
  • Commercial property prices: + 6.7 percent

The start to the year 2017 was characterized by a further increase in prices on the German real estate market. Calculated on the basis of real transaction data, the vdp property price index was 6.0 percent up on the corresponding quarter one year earlier (Q1.2016: + 5.8 percent). In this context, prices for residential properties went up by 5.7 percent (Q1.2016: + 6.4 percent), while prices for commercial properties rose by 6.7 percent (Q1.2016: + 3.8 percent).

“As expected, developments on the housing market remained dynamic in the first quarter,” said Jens Tolckmitt, Chief Executive Officer of the Association of German Pfandbrief Banks (vdp). Particularly in metropolitan regions and attractive university towns, the market for existing properties cannot at present satisfy the demand.

“But building permits and construction backlogs point to growth in new construction activity. However, the long production times typical for the construction sector and high capacity utilization levels will only ease this market situation with a time lag. For this reason, a dampening effect on price dynamics is likely to unfold only gradually,” Tolckmitt continued.

However, the main driver of prices on the German property market was once again the commercial market, in particular the offices segment. The capital value index for office properties advanced by 8.4 percent in the period under review. This sharp increase was attributable to both the user and the investment market.


For details on how the individual market segments developed, and for all index data on the individual vdp property price indices (2003-2017) including charts and tables, please refer to the attached publication.