The German real estate market in 2024 navigates through changing interest rate landscapes and new sustainability requirements. Learn how to make informed decisions despite price stabilizations and rising rents, and discover the opportunities now available.
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The topic briefly and concisely
Property prices are stabilising in 2024 after declines, while rents continue to rise; mortgage interest rates remain steady at around 3.5%.
Sustainability and energy efficiency are crucial value drivers; properties with a good energy balance achieve prices up to 25.1% higher.
Regional differences and declining new construction activities shape the market and require a precise local analysis.
Are you wondering whether 2024 is the right time for real estate investments or sales? The German property market, after significant price declines of up to 20% in some regions, is now showing the first signs of stabilisation at the levels of 2019-2021. Construction interest rates have settled at around 3.5%. This article analyses the current real estate market trends for 2024, examines price developments, interest rate landscapes, and the growing influence of sustainability, providing you with data-driven decision support.
The essentials at a glance: Real Estate Market Germany 2024
The real estate market in Germany is undergoing a phase of realignment in 2024. After a decline in residential property prices by 5.7% in the first quarter of 2024 compared to the previous year, prices are now stabilising. Meanwhile, rents, particularly in metropolitan areas, continue to rise. A price increase of around 3.0% for German properties is even expected again for 2025.
Price dynamics: Purchase prices stabilise, rents continue to rise
Purchase prices for residential properties in Germany showed a decrease of an average of 5.7% in the first quarter of 2024 compared to the same quarter last year. This marks the sixth consecutive quarterly decline. However, experts see signs of a bottom formation, with prices stabilising at the levels of 2019-2021. In major cities and independent urban districts, prices for apartments as well as detached and semi-detached houses are already beginning to rise slightly again. In contrast, rents continue to climb. In Berlin, for example, rents for existing apartments have risen by 29% and for new builds by 21% since the beginning of 2022. This development potentially makes purchasing a property more attractive. A detailed market analysis of the trends requires a careful examination of the local conditions. The differing development of purchase and rental prices calls for a thoughtful assessment of your options.
Interest rate development: Stable construction interest rates around 3.5% are shaping the market
The mortgage interest rates, after a rise up to 4.23% in 2023, have currently stabilised at around 3.5%. For 2024, the interest rates with a 10-year fixed period fluctuated between a good 3.7% and 3.2%. This stabilisation is an important factor for buyers and sellers. Experts anticipate a sideways movement of rates for 2025, based on the current level. Close monitoring of future trends in the valuation sector can help determine the optimal timing for financing. The following aspects are currently relevant for financing:
Sufficient equity is crucial.
Comparing financing offers is more important than ever.
Funding opportunities should be examined.
Long-term fixed rates can provide planning security.
This interest rate landscape poses new requirements for the financing strategy of property buyers. A professional evaluation by Auctoa or a conversation with our ImmoGPT-Chat can help you optimise your financing options in the current interest rate environment.
Sustainability and Energy Efficiency: Key Drivers in Focus
The trend towards sustainability and energy efficiency continues to gain momentum in 2024, becoming a crucial value factor. Properties with good energy performance have experienced significantly smaller price declines; the price difference between properties with poor and good energy performance can be up to 25.1%. In Germany, 84% of experts report an increasing demand for 'green' buildings. Over half of German professionals state that sustainable properties achieve higher sales prices and rents. An apartment with high energy efficiency can achieve a price premium of up to ten percent or more. The technology trends in the real estate industry support this development. For investors, this means:
Investments in energy efficiency pay off in the long term.
Higher market values and more stable price developments are the result.
The attractiveness of energy-efficient apartments for renting is increasing.
Legal requirements and support programmes (e.g., KfW) promote sustainable construction and renovation.
The consideration of ESG criteria (environment, social, governance) is becoming increasingly important for investors. This has a sustainable impact on property valuation and marketing.
Regional Differences and New Construction Activities
The German real estate market in 2024 is characterised by significant regional differences. While in metropolitan areas such as Munich and Hamburg, demand and prices tend to remain stable or increase in the long term, rural regions may experience varied developments. In major cities, the demand for rental properties remains high, while pressure on property prices is increasing. Simultaneously, some rural areas benefit from remote working trends. New construction activity is declining due to rising construction costs and interest rates. For instance, in 2023, only 19 building permits per 10,000 inhabitants were issued in Stuttgart. Nationwide, only about 175,800 building permits were issued in 2024, well below the political target of 400,000 per year. This supply shortage, especially in urban centres, supports rental price development and influences the market development and valuation of existing properties. A precise analysis of the local future of land values is therefore essential.
Recommendations for Owners and Investors
In light of the current real estate market trends in 2024, specific action recommendations emerge. For sellers, a realistic price expectation, based on a professional valuation, is crucial. Highlighting energy advantages can positively influence the sale price, as properties with good energy ratings can command price premiums of up to 25.1%. Buyers should take advantage of the stabilised interest rates around 3.5% and carefully compare financing offers. A long-term perspective and consideration of sustainability aspects are equally important for buyers and investors. Investment strategies should take into account regional differences and ongoing demand in many segments. For complex decisions, such as selling an inherited property, a neutral valuation from Auctoa or a chat with our ImmoGPT can provide valuable clarity and help overcome challenges for real estate investors. A thorough analysis of pricing trends is essential.
immobilienmarkttrends-2024
The property market in 2024, despite challenges, presents opportunities for informed participants. The stabilisation of purchase prices and construction interest rates creates a more predictable environment. The increasing importance of energy efficiency and sustainability opens up new potential for value enhancement. A careful analysis of the individual situation and the specific property is essential. Use Auctoa's expertise for a data-driven assessment and strategic advice to optimally leverage the current 2024 property market trends for your goals.
Additional useful links
Wikipedia offers a comprehensive overview of the real estate market in Germany.
The Federal Statistical Office (Destatis) provides detailed information on construction prices and the property price index.
A press release from the Federal Statistical Office (Destatis) reports on current developments in property prices.
The IW Housing Index of the German Economic Institute (IW Cologne) offers a comprehensive report on the residential real estate market.
The Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR) publishes a report on real estate economic trends.
The ZEW Financial Market Report from the Leibniz Centre for European Economic Research contains analyses on the financial and real estate markets.
A weekly report from the German Institute for Economic Research (DIW) highlights the real estate market in crisis mode with falling purchase prices and rising rents.
The Financial Stability Report of the Deutsche Bundesbank provides insights into potential risks in the real estate market.
A report from the German Economic Institute (IW Cologne) analyses confidence in the real estate industry.
FAQ
Will property prices continue to fall in 2024?
After a 5.7% decline in Q1 2024 compared to the previous year, property prices are currently stabilising. Experts even anticipate a slight increase of around 3.0% for 2025. However, regional differences should be taken into account.
What are the key trends in the real estate market for 2024?
The key trends include the stabilisation of purchase prices while rents continue to rise, stable construction interest rates around 3.5%, the growing influence of sustainability and energy efficiency, significant regional differences, and a decline in new construction activity.
How will interest rate developments affect property purchases in 2024?
The mortgage interest rates have stabilized at around 3.5%. This makes financing easier to plan than last year. However, having a sufficient equity share and carefully comparing offers remain very important.
Why is sustainability so important in real estate in 2024?
Sustainable and energy-efficient properties retain their value better and achieve higher prices (up to 25.1% more). Additionally, demand is increasing, and there are incentive programmes for energy renovations.
Should I sell my property in 2024?
A sale may be worthwhile in 2024 if you have a realistic price expectation based on a professional evaluation. Particularly, properties with energy-efficient renovations can fetch good prices. Have your property evaluated by Auctoa to make an informed decision.
How can Auctoa assist me with my property decision?
Auctoa offers objective, AI-driven property valuations and strategic advice as your digital companion. We help you understand the current property market trends for 2024 and make data-driven decisions for buying, selling, or investing. Also, use our ImmoGPT chat for quick answers.
