Vdp, Europace figures confirm 6% rise in German residential prices
Depending on the source, athough both are in their own way reliable and correlate closely with each other, German house prices rose by 5.9% on average last year, with all the signals showing a return to strong growth through January of this year.
Firstly the figures in a new report from the Verband deutscher Pfandbriefbanken (the association of Pfandbrief-issuing banks) show that prices for German housing rose by 5.9% last year, up from the 5% rise in 2014. Commercial property prices by contrast rose by 2%, down from the 3.8% price rises of 2014.
According to vdp CEO Jens Tolckmitt, multi-family home values rose 7.8% and rents rose 4%, making it the top-performing sub-sector. “Rents are rising, albeit more slowly, but investors are ready to accept ever lower yields against the backdrop of the general return environment and missing alternative investment opportunities.”
Tolckmitt said the vdp is not expecting any let-off in rental levels for the moment, with the willingness of investors to accept even lower yields a function of future monetary policy and their own risk tolerance.
Among the sub-indices, owner-occupied homes gained 4.4% last year, while apartments rose 5.2%. Since 2003, general house prices rose by 32%. In the commercial sector, office prices rose by 3%, with those for retail property rising by 2%. Office rents gained 1.5%, with retail rents up 0.5%.
Meanwhile figures in from Europace, the matching platform that is part of listed Berlin fintech group Hypoport, correlate closely with the picture painted by the vdp. At REFIRE we track the Europace figures closely as it is based on data from Hypoport's own comprehensive database of actual prices paid, rather than just advertised prices. The Europace platform transacts €35bn annually, or nearly 15% of all private sector mortgages.
The Europace data shows German residential property prices rising 5.98% in the twelve months to January 2016. “Prices for apartments with almost 8% growth rose stronger than those for houses again,” said chairman Thilo Wiegand.
In the index’s sub-segments, apartment prices gained 7.94% over January 2014, new single and dual family homes rose 3.9% and existing ones 6.32%. Price growth rose slightly on December, when the annual gain reached 5.57% for the total index. Existing homes fell in value in October and November but returned to growth in December, gaining 0.23% and following it up with 2.17% in January.