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Nachrichten, Termine, Experten
Sales prices for apartments, single- and multi-family homes fell again in 2024 compared to the previous year. This was due to the continued fall in prices in the first quarter. Although a turnaround then set in, it was not strong enough to produce a positive outcome for the year. This is the result of a current evaluation of the German Real Estate Index (GREIX), a joint project of the local expert committees (Gutachterausschüsse), ECONtribute, and the Kiel Institute for the World Economy based on notarized sales prices.
A comparison of the actual sales prices achieved on the German housing market shows that apartment prices traded 1.5 percent lower in 2024 than in 2023. Single-family homes were 1.6 percent and multi-family homes were 3.0 percent below the respective previous year's price. Adjusted for inflation and hence measured in current purchasing power, the reduction in prices was somewhat greater and around two percentage points higher.
"The German housing market has left the absolute lows of the downturn behind for the time being, and transaction figures have also picked up again," says Jonas Zdrzalek (https://www.ifw-kiel.de/de/expertinnen-und-experten/jonas-zdrzalek/), real estate expert at the Kiel Institute. "However, monetary and foreign policy uncertainties slowed down the upswing at the end of last year again to some extent."
Compared to their highs in 2022, prices for apartments in 2024 were still significantly lower at minus 11.4 percent. Adjusted for inflation, the decline was even 18.2 percent.
Single-family homes did cost 12.9 percent less than at their peak (minus 19.6 percent when adjusted for inflation). The decline was even more drastic for multi-family homes, where sales prices in 2024 were 21.6 percent below the peak (adjusted for inflation, minus 27.6 percent).
Comparison of major cities: regionally positive annual balance sheet
The volatility and uncertainty in Germany's major cities led to some contrasting annual results. In Frankfurt, prices for apartments rose by 3.9 percent between 2023 and 2024. In Leipzig, property prices rose slightly by 1.5 percent.
There were slight declines in Dresden (minus 0.6 percent) and Berlin (minus 1.8 percent). Prices fell more sharply in Munich (down 2.1 percent) and Stuttgart (down 3.2 percent). The sharpest decline among Germany's major cities was in Hamburg, where prices fell by 4.9 percent compared to the previous year.
New builds stable in price and close to peak
Newly built properties were traded in significantly greater numbers again last year (transaction increase of 40 per cent). However, they still only account for ten percent of all housing transactions. In the 2010s, new builds accounted for between 20 and almost 30 percent of total sales in the top 7 German cities (Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich, and Stuttgart).
Newly built properties have proven to be much more stable in prices and have hardly lost any value during the crisis. Prices for newly built apartments in the top 7 metropolitan areas are almost at their highest levels in 2024.
In contrast, prices for existing properties continued to fall. Classic old apartments built before 1950 were traded 2.3 percent cheaper than in 2023, while prices for existing apartments built after 1950 fell by 1.8 percent. As a result, these sales prices were now around 13 percent below the highs from 2022.
"Two opposing forces are currently affecting purchase prices on the housing market, and it remains to be seen which will prevail. On the one hand, rising interest rates are putting pressure on prices. On the other hand, there is a severe housing shortage, particularly in cities, and supply is limited, which is driving prices up," says Zdrzalek.
On our own behalf:
You can now view even more data than before on our website www.greix.de. In addition to the indexed price development and the prices per square meter, you can now also find the number of transactions, the average year of construction of the properties traded, and the average living space for selected cities. The new data is currently still in the beta version stage and is therefore not available for all cities.
Methodological note
The price development of the GREIX is calculated as an index. This is the only way to use statistical methods (hedonic method) to eliminate distortions that would otherwise occur with average prices per square meter. For example, the sale of a particularly large number of high-priced properties, for example due to a high number of square meters, good location, or good condition, leads to rising average prices per square meter, but such an increase is not based on a general increase in the value of properties. The formation of the index means that there is no upward or downward distortion in the price trend due to specific characteristics of the properties sold.
About the GREIX:
What is the GREIX?
The GREIX is a real estate price index for Germany based on the sales price collection of the local expert committees, which contains notarized sales prices. It tracks the price development of individual cities and neighborhoods back to 1960 and is based on more than two million transaction data. The dataset can be used to analyze long-term trends in the real estate markets and to place current developments in a historical context.
What data and methods are used to create the indices?
The data collection and evaluation take place in cooperation with the local expert committees. All real estate transactions are recorded in full. The price development is calculated according to the latest scientific standards and statistical methods (hedonic regression method). The GREIX thus stands for the highest scientific data quality.
Who finances the GREIX?
GREIX is financed by public funding and is a project of the Bonn-Cologne Cluster of Excellence ECONtribute, which is funded by the DFG, and the Kiel Institute for the World Economy, in cooperation with the local expert committees. Its aim is to increase price transparency in the real estate market. Different price indices for 20 cities and regions are freely accessible at www.greix.de. Additional cities will gradually be added to the data set.
Media Contact:
Mathias Rauck
Chief Communications Officer
T +49 431 8814-411
mathias.rauck@ifw-kiel.de
Kiel Institute for the World Economy
Kiellinie 66 | 24105 Kiel | Germany
Chausseestraße 111 | 10115 Berlin | Germany
T +49 431 8814-1
E info@ifw-kiel.de
www.ifw-kiel.de
Jonas Zdrzalek
Kiel Institute Researcher
T +49 160 98272770
jonas.zdrzalek@ifw-kiel.de
Price Development Market Segments 2024
Kiel Institute for the World Economy
Price Development Apartments
Kiel Institute for the World Economy
Price Development Apartments by Construction Year
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Price Development Market Segments 2024
Kiel Institute for the World Economy
Price Development Apartments
Kiel Institute for the World Economy
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