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News Release


Jones Lang LaSalle updates its Residential City Profiles - Further sharp rise in rents and sale prices in the housing market


Press release including graphs [PDF]


Frankfurt, 11. September 2013 – Rents and sale prices in eight German cities once again rose sharply in the first six months of 2013. 
Rents* in Berlin and Munich increased by 8% to 10% year-on-year. In Stuttgart, Cologne and Leipzig, rents rose by 5% to 7%, and in Hamburg, Frankfurt and Düsseldorf, growth of 2% to 4% was registered. 
Year-on-year, sale prices for condominiums* in almost all cities once again rose at a higher rate than rents, and in Düsseldorf, Leipzig, Munich and Cologne by over 13%. In Stuttgart and Berlin, asking prices rose by 9% and 11%, and in Frankfurt and Hamburg by 8%. 
“Individual markets registered a general slow-down at the end of 2012; however, the first six months of 2013 saw the second highest rise in rents and sale prices in all researched cities for the first time since the analysis started in 2004. Activity was only much stronger in the first six months of 2012”, explains Andrew M. Groom, Head of Valuation & Transaction Advisory Jones Lang LaSalle Germany. He adds: “Only sustainable housing construction activity will slow down the rise in price over time.”

An overview of the results of the investigation of the individual cities:
Munich remains the most expensive housing market – Berlin sees the highest growth in the first six months
Munich saw a stable upwards trend in rents in the first six months. The traditionally most expensive of the housing markets researched recorded a new prime asking rent of €14.45 per sqm per month (+9.8%) and thereby the highest rise in rents year-on-year. This means that the gap to second-placed Frankfurt and the other markets widened yet further. 
The path to growth, which started in 2011, also continued in Berlin. After Munich, the federal capital has enjoyed the second highest year-on-year rises in asking rents in the housing market (+8.2%). In the first six months, rents rose at a greater rate than in Munich (+5.3% compared to +4.7% in the Bavarian state capital). “The price uplift in Berlin in now encompassing almost all locations inside the city limits. In the interim, even more inexpensive city districts such as Marzahn have seen a sharp rise in some rents. At the same time, the number of building permits is increasing gradually and could provide some relief to the housing market over the medium-term, however only if there are no political changes to the current investment environment. Legislation, such as the rental cap, could restrict future investment in new housing”, according to Roman Heidrich, Head of Residential Valuation Advisory Berlin.
In the first six months of 2013, asking rents in Hamburg remained stable for the first time since 2007. The intensive search for inexpensive alternatives in the housing market during this period has ensured that the longest upswing phase of a German major city has come to an end, at least for now; nonetheless, it still managed to record a rise of 1.8% to €10.70 per sqm per month over the course of the year. 
Frankfurt and Stuttgart were two of the rental markets with a stable upwards trend in the first six months of 2013. Asking rents have increased in the Main Metropolis by 3.7% to €11.95 per sqm per month since mid-2012; in the Swabian state capital, they have seen a year-on-year increase of €0.75 to €10.60 per sqm per month (+7.4%). 
In Düsseldorf, rents saw a significant year-on-year rise in the first six months of 2013 of +3.6% to €9.25 per sqm per month; nevertheless, Cologne overtook the North Rhine-Westphalian state capital again in the first half of the year following an uninterrupted rise in rents since 2011. Year-on-year, the Cathedral City was able to record a rise of 5.4% to €9.30 per sqm per month. 
After Berlin, Leipzig showed the strongest growth (+5.0%) in the first six months of 2013, surpassing the €5.00 per sqm per month mark for the first time since 2004 and reaching €5.30 per sqm per month. The high numbers of new residents and low volume of housing construction activity caused a city-wide recovery of rental levels for the first time.
Condominiums in Munich achieving only slightly below €5,000 per sqm - strongest price rise in the first six months in the less expensive cities of Cologne and Leipzig
In Munich, sale prices of condominiums approach the €5,000 mark (€4,830 per sqm) and, with growth of 14.1% year-on-year, achieved the second highest price rise of all eight cities. This means that Munich can continue to extend its price leadership, also in this segment.
In contrast to the rental market, prices of condominiums in Hamburg continued to rise, although the first year saw the lowest rise in sale prices of all of the researched cities (+2.5%); nonetheless, prices grew by a remarkable +8.2% year-on-year, reaching €3,300 per sqm. 
Frankfurt displayed a solid upward trend in the first half of the year. Year-on-year, prices for condominiums increased by 8.1% to €3,170 per sqm. “Since 2011, we have seen significant uplift in prices in Frankfurt. Despite the visible efforts being made by Frankfurt City Council to promote housing construction and the rise in the number of building permits, demand for new-build accommodation continues to outstrip supply”, explains Sebastian Grimm, Head of Residential Valuation Advisory Frankfurt. He adds: “As long as the financing conditions remain favourable, sale prices for condominiums in Frankfurt – as in other major cities – will rise more sharply than rents.” 
In Düsseldorf, the rise in sale prices for condominiums slowed down in the first six months of 2013, with prices even falling in individual locations such as Eller or Lierenfeld; however, growth was a remarkable 19.3% year-on-year and is therefore the highest recorded rise of all eight cities. The median sale price reached a new peak at €2,580 per sqm.
The slow-down in the growth of prices, which started in the second half of 2012, continued in Berlin (H1 2013: +3.5% after +7.7% in H2 2012). Year-on-year, prices have therefore increased by 11.2%, reaching €2,450 per sqm. 
Whilst average sale prices for condominiums in Stuttgart saw moderate growth between 2004 and 2011 (+1.4% p.a.), they have become much more expensive in the last two years. Annual growth is currently 9.3% (to €2,500 per sqm). There is a similar situation in Cologne: a longer period of only moderate growth was followed this year by a rise of 12.1% to €2,320 per sqm. Cologne was therefore only overtaken by Leipzig, which registered growth of almost 18%. Year-on-year, prices rose sharply in Düsseldorf (+14.8%); however, at €1,400 per sqm, the price level is still far below that of the other researched cities. The overall upwards trend in rents has caused a noticeable shift in the housing market in Saxony’s state capital.




For the eleventh time, Jones Lang LaSalle, as client, has undertaken independent research of trends in Berlin, Hamburg, Munich, Frankfurt am Main, Düsseldorf, Cologne, Stuttgart and Leipzig. Over 180,000 rental offers and 90,000 sale offers of condominiums were researched. The presentation of the analysed data records stretches to city district level, and is broken down into building age categories and apartment sizes. Further detailed analyses from 2004 can be requested.
* Note: rental and sale prices are quoted as median values, i.e. 50% of the values in a city lie above this value and 50% below.