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Residential Real Estate
The DB researchers said that average residential rents increased by 3% last year
As we report else where in this issue, most of our research brethren in Germany are expecting a slower rate of increase in the prices for residential real estate throughout 2014. DB Research expects new apartments to rise by 5% nationwide, although up to 7.5% in the larger cities – after increases of up to 7% last year. Last year twelve German cities recorded price increases of more than 10%, up from seven cities the year before, one in 2011 and none at all in 2010 and 2009.
The DB researchers said that average residential rents increased by 3% last year, which puts their figure well ahead of the figure of 1.2% estimated by Destatis, the federal statistics office (the figure for 2012 was +4.8% on new leases).
The highest rental increases in 2013 were in Berlin, up 2.5% on the year, according to Destatis. However, apart from the larger cities and university towns, rents nationwide remained static. The eastern states of Mecklenburg-Vorpommern (+0.3%), and Brandeburg and Saxony-Anhalt (+0.9%) are cited as examples. The overall rate of rental increase between 2005 and 2013 for ‘cold’ rents i.e. without utility charges was 9.8%, while the consumer price index rose by 14.3% over the period.
Meanwhile Destatis also released figures from November showing that the price-adjusted value of new orders in the construction industry increased by 12.3% over the same period in 2012. Construction industry revenues at €10.1bn in November were 4.8% above the figure for November 2012. Between January and November, overall revenues rose by 1.9% to €87.0bn, says Destatis, although the figure is below the full-year estimates issued by industry associations HDB and ZDB. They see full-year revenues up 2.5% in 2013 to €95.3bn, and expect growth of 3.5% for 2014.