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Jena
The exception is the city of Jena, home to Zeiss Optik and Jenoptik and several institutes of higher learning, as well as a number of thriving industries. The city ranks among the top-10 regions in eastern Germany, with more solid prospects than the bigger cities of Dresden and Berlin.
Residential property owners in large parts of eastern Germany will have to reconcile themselves to a long-term fall in the value of their properties, says a new study carried out for Germany’s Postbank by research group Prognos Institute. In particular, property in rural areas is most at risk of seeing long-term erosion in value, although there are still some regional exceptions, says the study.
The cities of Jena, Potsdam and Dresden are well-placed to buck the trend, while Berlin and its hinterland - as well as Rostock, Erfurt and Leipzig - have about a 50-50 chance of holding their property values longer term.
The comprehensive study analysed factors such as vacancy rates, demographic forecasts, current living conditions for the over-60 year olds, and labour density.
Among the study’s findings: In the state of Thüringen, normal housing is almost universally affordable for most average earners. The exception is the city of Jena, home to Zeiss Optik and Jenoptik and several institutes of higher learning, as well as a number of thriving industries. The city ranks among the top-10 regions in eastern Germany, with more solid prospects than the bigger cities of Dresden and Berlin.
Neighbouring cities Weimar and the state capital Erfurt are also in the top-10 for property price appreciation, although Erfurt is still considered affordable, with the average mortgage burden well under the recommended maximum of 40% of net household monthly income.
The study finds that in 70 of 77 eastern German municipalities households with below-average monthly income can still finance a typical 70 sqm apartment. Households with an average income can afford a 110 sqm apartment in three out of four municipalities in the region. Again, in most categories, Jena proves the exception, with housing being noticeably more expensive – albeit with still higher appreciation potential.
The study lists the following top-10 regions in eastern Germany for price rise potential:
Jena, Potsdam, Dresden, Landkreis Potsdam-Mittelmark, Weimar, Berlin, Erfurt, Landkreis Dahme-Spreewald, Landkreis Oberhavel, Landkreis Teltow-Fläming
