vdp-Index: Real estate prices rise further: growth momentum flattens slightly

  • vdp property price index up by 8.3 percent in the second quarter of 2018
  • Jens Tolckmitt: “Although prices rose again considerably year on year, we are seeing a slight flattening in momentum compared with the start of 2018.”

The second quarter of 2018 saw prices in the German real estate market rise further. The vdp property price index, which is calculated on the basis of real transaction data, increased by 8.3 percent compared with the corresponding quarter one year earlier. All the asset classes under review contributed to this result. In the first quarter of 2018, the index advanced by no less than 8.8 percent year on year. This was the highest growth rate since observations began in 2003.

Residential properties remain the main focus of interest, with prices climbing in Germany as a whole by 8.7 percent year on year. The strong demand for living space saw new lease rentals rise by 4.6 percent compared with the corresponding quarter in 2017. At the same time, multi-family houses are in high demand among both domestic and foreign investors as investment properties. This led to a jump in purchase prices by 9.7 percent, while cap rates fell by 4.7 percent. The discrepancy between supply and demand in the housing market was even more pronounced in Germany’s top 7 urban concentrations. The residential property price index for the top 7 cities surged by 10.7 percent, which was two percentage points more than for the German market as a whole.

“Although prices rose again considerably year on year, we are seeing a slight flattening in momentum compared with the start of 2018,” remarked Jens Tolckmitt, Chief Executive Officer of the Association of German Pfandbrief Banks (vdp). “The macroeconomic conditions for the German economy remain favorable, and alternative investments are scarce. This explains the unflagging demand in spite of the elevated price levels. Although Brexit and the trade conflict between the USA, China and the EU are two issues which certainly do entail risks for Germany’s export-dependent economy, this currently seems to have very little impact on the German property market,” Tolckmitt continued.  

The hike in prices for commercial properties in the second quarter came to 7.1 percent. Developments here are shaped, above all, by demand for office premises. The price index for this market segment went up by 9.2 percent. Price movements in the retail property segment were more subdued, with prices rising by 3.1 percent year on year.


For information on developments in the respective sub-markets and for all index data on the individual vdp property price indices (2003-2017) including charts and tables, please refer to the related publication. The broschure as well as all time series in XLS-Format you will find under statistic also. Moreover, vdpResearch provides a differentiated assessment of the regional top 7 housing markets including all sub-segments (owner-occupied housing and multi-family houses) at