Urban Density versus Rural Spaciousness: How Infrastructure and Development Projects are Redefining Property Value
Are you faced with the decision between investing in dynamic urban infrastructure or the promising rural tranquility? Property values in Germany are shifting, driven by new development projects and a growing urban exodus. This article provides the critical metrics and strategic insights to maximise the potential of your property.
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The topic briefly and concisely
The prices of building land in Germany increased by approximately 9% annually between 2015 and 2022.
Since 2014, large cities have been experiencing migration losses to surrounding areas, which is increasing the demand for rural housing.
Targeted funding programs such as the ELR in Baden-Württemberg support private building projects in rural areas with up to 200,000 euros per project.
The decision between city and country is more complex today than ever. While land prices in metropolises like Munich are reaching record highs with an average of 2,400 euros per square metre, rural areas offer plots for under 100 euros. This enormous price difference not only reflects demand but also raises a strategic question: Where does the true future potential lie? The answer is found in the interplay of urban infrastructure, rural tranquillity and targeted development projects. For owners and heirs, understanding this dynamic is crucial to not only securing but strategically enhancing the value of their properties. A precise, data-driven valuation is the first step.
The new urban-rural dynamics: Price gap and migration trends
Key Insights
Building land prices in Germany rose by around 9% annually between 2015 and 2022.
Since 2014, major cities have been experiencing migration losses to the surrounding areas, increasing demand for rural housing.
Targeted funding programmes like the ELR in Baden-Württemberg support private construction projects in rural areas with up to €200,000 per project.
Good access to public transport can significantly enhance a property's value.
The German property market shows a clear division. In the top 7 cities, land prices for building plots have increased by about 10% annually since 2016. At the same time, we are witnessing a notable trend reversal: Since 2014, more people have been moving from independent cities to more rural districts than vice versa. This trend, often referred to as “urban exodus”, is driven by the desire for more space and affordable ownership. In 2023 alone, Berlin lost around 16,750 residents to neighbouring Brandenburg. This internal migration is creating new demand centres away from the metropolises. For property owners in these regions, now is the time to evaluate the potential of their building land. The growing demand is sustainably changing the landscape of property values and opening up new opportunities.
Value Driver Infrastructure: More Than Just Good Connectivity
The value of a property is significantly influenced by its surroundings. Efficient infrastructure is the decisive factor in this. Studies show that good public transport connections directly correlate with higher property prices. However, modern infrastructure now encompasses far more than just buses and trains. The government has set the goal of achieving nationwide Gigabit network coverage by 2030, which is a crucial attractiveness factor, especially for rural areas. A fast internet connection is more important for many today than proximity to the nearest motorway junction. These digital development projects make rural areas attractive to new target groups. The following list shows which infrastructure factors particularly influence the value:
Digital connectivity: Availability of fibre-optic internet with at least 100 Mbps.
Transport connections: Access to a train station or motorway within 20 minutes.
Social infrastructure: Proximity to schools, kindergartens, and medical care.
Local amenities: Supermarkets and everyday service providers within less than 10 minutes away.
The analysis of how these factors interplay is complex. A professional assessment of the infrastructure helps determine the true value of a property. For it is not only the existing but also the planned infrastructure that determines future value potential.
Rural Tranquility as an Opportunity: Where Untapped Potential Lies Dormant
Beyond the expensive metropolises lies significant potential. While the average cost per square metre for building land in Germany was 226.34 € in the second quarter of 2024, there are rural areas with prices as low as 20 euros. This discrepancy opens up strategic opportunities for investors and developers. The key to unlocking this potential lies in targeted development projects, which are often state-supported. The Federal Programme for Rural Development (BULEplus) and the Joint Task for the Improvement of Agricultural Structures and Coastal Protection (GAK) are just two examples of national funding instruments. These programmes aim to strengthen the quality of life and economic foundation in rural areas. They not only support agriculture, but also the creation of housing and the establishment of businesses. Those considering acquiring a recreational property for leisure should also assess the development potential. Often, significant added value can be created through repurposing or new construction.
Development projects as a bridge between city and countryside
Development projects are the driving force that bridges the gap between urban demand and rural supply. They range from filling individual building gaps to developing entire residential quarters. In Baden-Württemberg, for instance, the Rural Development Programme (ELR) specifically promotes the creation of housing in town centres to prevent urban sprawl. Private developers can receive grants of up to 200,000 euros for this purpose. Such projects not only increase the value of directly involved properties but also enhance the entire surroundings. The following measures are particularly value-boosting:
Repurposing existing buildings: The modernisation of old barns or factories into modern lofts or residential units.
Infill development in the town centre: Closing building gaps prevents the designation of new building areas and strengthens village centres.
Creation of community facilities: Investments in local meeting points or co-working spaces.
Improvement of energy efficiency: Energy refurbishments supported by programmes such as those of the KfW.
Each of these projects contributes to increasing the attractiveness of a location. Wondering what potential your property holds? A KI-driven analysis like our ImmoGPT can give you an initial, quick assessment. Detailed knowledge about the development potential of building land is the key to maximising value creation.
Conclusion: Strategic Evaluation as the Key to Success
The decision between urban infrastructure and rural tranquillity is no longer just a matter of feeling, but a strategic consideration of metrics and future potential. The prices for building land increased by an average of 9% per year between 2015 and 2022, yet the development varies greatly by region. While the urban exodus drives demand in the surrounding areas, targeted development projects and funding programmes systematically enhance rural locations. The true value of a property is only revealed through a neutral, data-driven analysis that goes beyond the mere land reference value. Whether you’re planning to sell, manage an inheritance, or make an investment, a sound valuation protects you from costly mistakes. Take advantage of the opportunity for a non-binding and objective valuation by Auctoa to understand the full potential of your property. A wise decision begins with reliable data.
urbane-infrastruktur-landliche-ruhe-entwicklungsprojekte
Additional useful links
Das Statistische Bundesamt offers detailed information on construction prices and the property price index in Germany.
Statista shows the proportion of apartments in single-family and two-family houses by urban and rural areas in Germany.
Statista highlights the development of land prices in urban and rural areas of Germany.
Die Bundesbank provides an analysis of the price surge in residential properties in Germany.
Wüest Partner offers insights into the German real estate market and its offerings.
FAQ
How do I discover the true potential of my property?
A professional, data-driven property evaluation is the best way. It not only analyses the current standard land value, but also factors such as local infrastructure, planned development projects, and market trends. Tools like the Auctoa ImmoGPT can provide a quick initial indication.
What type of development projects increase value the most?
Projects that create modern living spaces (e.g., through repurposing or closing construction gaps) and improve local infrastructure (e.g., fibre optic expansion, local supply) have the greatest positive impact on property values in the area.
Are properties in the countryside a safe investment?
With the right strategy, yes. Rural properties can be a secure investment if the location has potential (e.g., good connections, growing community) and development trends are positive. A thorough location analysis is crucial here to minimize risks.
How does demographic development affect property values?
Demographic change is leading to an aging population in many rural areas. At the same time, however, young families and workers are moving to well-connected rural regions. Locations that are attractive to these target groups will experience positive value development.
