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News Release


Continued Upward Trend in the German Residential Rental and Condominium Markets – Greater Momentum in Some Areas

​Press release including charts [PDF]

FRANKFURT, 10th September 2015 – The upward trend in rental prices in the eight cities* under review by JLL lost some of its momentum in the first half of 2015; on the other hand, there has been yet another significant rise in purchase prices.
“There is no evidence of an overall trend reversal towards less significant rises in rents and purchase prices. Inward migration into the cities has brought increased demand and, at the same time, there are still too few new-build residential units being constructed. The reasons for this are planning law, neighbourhood objections and a significant rise in land prices in the major cities due to the increasing scarcity over the past few years” advised Roman Heidrich, JLL Team Leader Residential Valuation Advisory Berlin.
The greatest rise in rental prices** in the first half of 2015 compared to the same period in 2014, of 9.0%, was observed in Stuttgart. There were rises of between 5.0% and 6.0% in Leipzig, Munich, Frankfurt, Cologne and Berlin, and significantly lower growth rates of around 2.0% registered in Düsseldorf and Hamburg. Over the same period, there was a significantly greater rise in purchase prices for condominium apartments**, with double-digit rises in purchase prices of between 11.0% and 13.0% in Frankfurt, Stuttgart and Düsseldorf. Purchase prices rose by 9.0% in Munich and Berlin and by between 6.0% and 7.0% in Leipzig, Cologne and Hamburg.
“The highest point in terms of price development was observed in 2012 and 2013, with annual growth rates of up to 20.0%. Although growth rates are not reaching the levels of both those years, there is no end in sight for the significant upward trend. The underlying conditions of increasing demand, due in part to reasonable financing conditions and the low levels of new-build activity, will lead to further rises in purchase prices” according to Sebastian Grimm, JLL Team Leader Residential Valuation Advisory Frankfurt.

Overview of research results for the individual cities:
Rental price increase has slowed down slightly across the board – greater momentum still in evidence in Frankfurt, Cologne and Leipzig
In the first half of 2015, asking rents in Munich rose slightly less dynamically at 1.9% (compared to 4.3% in the second half of 2014). The median monthly rent reached €15.95 per sqm. This is a year-on-year rise of 6.2% (compared to the rise of 3.7% in the period mid-2013 to mid-2014). On the other hand, there was a stronger year-on-year upward trend in Frankfurt with a rise of 5.6% to €12.75 per sqm (compared to 1.0% in the same period in 2014). The highest annual rise of all cities under review was registered in Stuttgart with 8.5% (compared to 4.0% in the previous year); monthly rents increased to €11.95 per sqm. There was a moderate rise in Hamburg, where rents rose by 1.7% year-on-year to €10.80 per sqm (compared to a fall of 0.6% last year). Hamburg is also the only city showing a marginal fall in rental prices in the first six months of 2015 (-0.5%). The significant upward trend in Cologne continued apace in the past half year. Rents rose by 5.1% year–on-year to €9.90 per sqm (compared to a rise of just 1.3% in the first half of 2014). On the other hand, rent rises in Düsseldorf continued to flatten out at 1.6%, reaching just €9.65 per sqm (compared to mid-2014 with a recorded year-on-year rise of 2.3%). There was also reduced momentum in the capital Berlin. Here, the monthly asking rent of €9.05 per sqm showed an annual rise of 5.0%, but this included a growth of just 1.1% in the first half of this year. Rents rose by 7.7% in the 12 months from mid-2013 to mid-2014. The highest rent rise of all cities under review in the first half of 2015 was observed in Leipzig with 4.5%. Monthly rents rose by 6.2% year-on-year to €5.80 per sqm (compared to 3.2% in the period from mid-2013 to mid-2014).
“After the significant increases in the second half of 2014, there was a slight slowdown in rental growth in many cities in the first half of 2015” said Roman Heidrich. One reason for this is the shift in focus of potential tenants towards more reasonably-priced districts or the respective surrounding regions. He added: “The rental price cap in Berlin has not yet had any noticeable effect on rental price development in the first few months since its introduction on 1st June“.

Significant upturn in the condominium apartment markets in Stuttgart, Düsseldorf and Cologne
Whilst there was a significant purchase price increase observed in the condominium apartment markets in Stuttgart, Düsseldorf and Cologne compared to the previous half year, the upward trend in the other five cities under review showed down slightly, but remains at a high level. “In the new-build segment, condominium apartments remain attractive for project developers and investors, partly as a result of the increasing uncertainties in the regulatory environment for rental apartment construction. The supply of new-build apartments, mainly in the mid to upper price brackets, is being rapidly absorbed by the market” according to Sebastian Grimm.
The upward trend in asking prices for condominium apartments continued in Munich in the first half of 2015. With an annual rise of 9.1% (compared to 9.3% in the previous year), the average asking price is now €5,770 per sqm. In Frankfurt, the growth trend slowed down in the first half of 2015 for the first time since 2012, with moderate growth of 2.3% to €3,990 per sqm; however, this is still a significant year-on-year price rise of 12.6% (compared to 11.7% in the previous year). The upward trend in purchase prices also slowed down in Hamburg to €3,790 per sqm, a year-on-year rise of 6.1% (compared to 7.9% at mid-year 2014). The highest rise in all of the cities under review in the first half of 2015 was in Stuttgart. With a year-on-year price rise of 12.6% (compared to 18.5% in the first half of 2014), prices were at €3,340 per sqm. There was also a significant rise of 10.9% in Düsseldorf in the first half of 2015 (compared to 10.5% in 2014), with prices reaching €3,160 per sqm. The momentum of the last few half years continued in Berlin. Here, asking prices rose by 9.1% to €3,020 per sqm. The market for condominium apartments in Cologne was more active in the first six months of 2015, with a 4.4% uplift in prices (compared to 1.5% in the second half of 2014). There was a year-on-year price rise of 6.1% to €2,840 per sqm (compared to 15.6% in the same period last year), which was due mainly to a strong rise in the first six months of 2014. In the first half of 2015 alone, Leipzig registered a moderate rise of 1.5%, but there was a stronger year-on-year growth of 6.5% to €1,350 per sqm. This contrasts considerably with the 9.6% year-on-year fall in asking prices in the first half of 2014.



* In their Residential City Profiles, Jones Lang LaSalle has investigated trends in Berlin, Hamburg, Munich, Frankfurt am Main, Düsseldorf, Cologne, Stuttgart and Leipzig since 2008. A total of 180,000 rental offers and 80,000 purchase offers for condominium apartments were analysed. The data factors analysed are presented at city district level and are broken down into building age categories and apartment sizes. Further detailed analyses dating from 2004 are available on request.

** Note: rental and/or purchase prices describe the median, i.e. 50% of the values in a city lie above this value and 50% below.