vdp property price index: Property prices again rise markedly prior to outbreak of COVID-19 crisis

Berlin, 11 May 2020

vdp property price index up by 6.3% to new all-time high

The property price index of the Association of German Pfandbrief Banks (vdp) continued on its upward trajectory in the first quarter of 2020, climbing to a new historical high. Compared with the corresponding quarter in 2019, the index, which is calculated for the German market as a whole based on real transaction data, advanced to 165.1 points in the first quarter of 2020 (base year 2010 = 100 points). Thus, the transaction figures show that the COVID-19 pandemic did not yet have any discernible impact on the property market.

“The years-long property market boom continued unabated at the beginning of 2020,” commented Jens Tolckmitt, the vdp’s Chief Executive. “This means that growth in the first quarter was as yet largely unaffected by the COVID-19 pandemic and by the restrictions that it has triggered and which have been in force since mid-March. We are assuming that the upward trend will have been markedly slowed down following the outbreak of the pandemic, and perhaps even brought to a complete halt. It is our assessment that the caution and restraint we are currently observing on the property market will cause price growth to stagnate in the second quarter of this year. We expect the vdp index for 2020 as a whole to record slight growth given the strong increase early in the year.”

Overview of price growth in the first quarter of 2020:

Residential/commercial properties overall: +6.3 %
Residential properties in Germany: +6.5 %
Residential properties in top 7 cities: +2.9 %

Commercial properties: +5.4 %
 - Office properties: +8.4 %
 - Retail properties: -1.1 %

As in the previous quarters, price growth for residential properties exceeded that for commercial properties at the beginning of 2020. Residential properties across Germany went up in price by 6.5% on average. This increase was driven by both owner-occupied housing and multi-family houses, which recorded growth rates of 7.0% and 6.1% respectively. New lease rentals rose by 3.9%.

Considerably lower price momentum in top 7 cities

In the top 7 cities of Berlin, Cologne, Düsseldorf, Frankfurt, Hamburg, Munich and Stuttgart, residential property prices again rose at a considerably slower pace than on the German market as a whole in the first quarter of 2020. The 4.1% increase in prices for owner-occupied housing made an above-average contribution to the 2.9% growth rate, whereas prices for multi-family houses advanced by only 2.6%. New lease rentals in the top 7 cities rose by 1.9% year on year.

“Price momentum in the top 7 cities flattened further at the beginning of 2020.  This trend will intensify as the year progresses. Besides the effects of the restrictions triggered by the COVID-19 crisis, state interventions such as the rent cap will also have a substantial negative impact on price growth in the metropolitan areas, above all in Berlin,” said Tolckmitt.

Retail property prices down again

In the first quarter of 2020, prices for commercial properties across Germany rose by 5.4% year on year, with the two property categories in our focus following totally different paths of development. Whereas office properties again experienced a considerable increase in prices (+8.4%) compared with the first quarter of 2019, retail property prices declined in the second quarter in succession, this time by 1.1%. This was due to the steadily growing market share of e-commerce, which again had a negative impact on demand for bricks and mortar retail space.

About the vdp property price index

The Association of German Pfandbrief Banks (vdp) publishes quarterly rent and price indices showing trends on German residential and commercial property markets, based on transactions that have taken place. Prepared by the analyst firm vdpResearch, the index is used by the Deutsche Bundesbank as part of its property price monitoring activities. Over 600 credit institutions operating in the German financial sector supply transaction data (purchase prices and rents actually achieved) on their real estate finance business, and it is these data that form the basis of the index.

Information on developments in the respective sub-markets as well as all index data on the individual vdp property price indices (2003 - 2019) may be found in the relevant publication and are also available as raw data at Moreover, vdpResearch provides a detailed assessment of the regional top 7 housing markets including all sub-segments (owner-occupied housing and multi-family houses) at