vdp index: Residential and commercial property prices up by nearly 6 %

Berlin, 11 November 2019

vdp property price index hits all-time high

The property price index of the Association of German Pfandbrief Banks (vdp) rose by 5.9% year on year in the third quarter of 2019. This means that the index, which is calculated for the German market as a whole based on actual transaction data, has hit a new all-time high at its current level of 159.7 points (base year 2010 = 100).

“The prices on the German property market are still going in only one direction: upwards,” observed Jens Tolckmitt, Chief Executive of the vdp. “Both residential and commercial properties remain very much in demand. As expected, however, the third quarter of 2019 saw a continuation of the trend observed in previous quarters, namely a steady slowdown in the pace of growth.”

Weaker price momentum for residential properties in top 7 cities

Prices for residential properties rose by 5.8% across Germany in the third quarter compared with the same quarter in the previous year, the lowest rate of growth for two and a half years. The latest growth was fuelled mainly by rising prices for owner-occupied housing (+6.0%), while prices for multi-family houses saw a somewhat smaller increase (+5.6%). New lease rentals climbed by 4.4%.

Residential properties in the top 7 cities of Hamburg, Berlin, Frankfurt, Cologne, Düsseldorf, Munich and Stuttgart experienced much slower growth in their prices, which were up by only 3.6% compared with the corresponding quarter in the previous year. The prices for multi-family houses (+3.7%) rose a little faster than those for owner-occupied housing (+3.4%).

“This weaker price growth is directly related to measures such as rent caps and the rent brake, which are having an impact in the major cities in particular but doing nothing at all to solve the housing shortage,” Tolckmitt said. “The trend also suggests that more and more people are moving to surrounding areas because of the price levels already reached in major cities.”

Strong demand for space driving up office property prices

The prices for commercial properties rose slightly more even than those for residential properties. Here too, however, the +5.9% increase in the third quarter of 2019 compared with the same quarter of 2018 was well down on the previous eight quarters.

Growth was driven once again by office properties, where prices were up by 8.8%. This was primarily due to the persistently high demand for space at a time when it was in short supply. New lease rentals for office properties thus rose too, climbing by 6.8%. By contrast, there was only a marginal increase in the prices and rents for retail properties (+0.1% and +0.3% respectively). Although restaurants, chemist’s shops and supermarkets have filled newly vacated space in many places recently, the price trend highlights the ongoing structural change in the retail sector triggered by the boom in online shopping.

“The current property cycle is continuing undeterred at its high level”

“The latest trend is quite remarkable,” Tolckmitt explained. “There is an economic downturn in Germany, Brexit is dragging on for an unbelievably long time, and geopolitical uncertainties are becoming increasingly prevalent. Yet the German property market appears immune to all this, as the ECB’s interest rate policy is more than offsetting the impact. So the current property cycle is continuing at its high level.”


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 actual transaction figures. 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 - 2018) 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