Every year business magazine WirtschaftsWoche and property portal ImmoScout24 produce their City Test, an annual ranking of German cities in terms of their business and real estate attractiveness. The ranking is also a useful monitor for how cities in the eastern part of the country are doing compared with their western counterparts, and this year’s study highlights again how decisive the differences are between the major cities in the east and the west, even 30 years after reunification.
The study shows the strides made by some eastern German cities. Potsdam is ranked 19th in the new federal states' best city ranking, Jena is ranked 28th, ahead of Dresden at 32nd and Berlin at 38th, but also ahead of the major western German cities of Hanover, Leverkusen, Aachen, Bremen, Kaiserslautern, Essen and Dortmund. The eastern German cities are viewed as particularly dynamic as training and research locations.
According to Ralf Weitz, managing director of ImmoScout24, "In the anniversary year of reunification, some of the major East German cities are showing an encouraging trend. Potsdam, Jena and Dresden in particular have achieved a good standard for locations. The dynamism in Leipzig, Rostock, Halle an der Saale and Chemnitz is also notable. Real estate for rent and to own can still be found comparatively cheaply in the East German cities.”
With a rating for sustainability included for the first time in this year’s study, Potsdam and Jena reached 8th and 11th place respectively, while Dresden came 22nd, ahead of west German cities such as Düsseldorf (24), Augsburg (26) and Frankfurt am Main (27), according to the analyzed criteria of ecological, economic and social sustainability. Chemnitz too ranked wll in 31st place, ahead of Cologne (37) and Hanover (42).
In the category of ‘dynamism’, Leipzig placed strongly at eighth. Rostock has moved up 10 places to reach 34th place. Halle an der Saale also made a big leap in the dynamics ranking by 12 places to 42nd place. Chemnitz improved by 11 places to 48th place. Erfurt made up two places in the dynamics ranking and is now 45th.
Where the eastern cities score highly is in their ability to attract research institutes and centres of higher learning in relation to the number of their inhabitants. Here, Jena and Potsdam are ranked first and third in this sub-indicator, while Halle an der Saale also stands out as a positive example of East German cities with its bundling of research competence, which could ensure further sustainable growth.
In terms of the number of research institutes per million inhabitants, Halle ranks 11th among all major German cities. The city's 13 institutes include the Fraunhofer Center for Silicon Photovoltaics (CSP), which is part of the second largest technology park in eastern Germany, - a home to institutions and companies from the solar and nano industry as well as the natural sciences faculty of the University of Halle-Wittenberg.
The focus on sustainable technologies is also reflected in the labor market. In terms of employees in sustainability professions, Halle ranks 28th (3.3 employees per 1,000 employees subject to social insurance contributions), ahead of Munich (55th) and Frankfurt am Main (64th) in this indicator. Potsdam secured the top position in this indicator with 10.1 employees per 1,000 employees subject to social insurance contributions. Dresden and Chemnitz are ranked 15th and 16th respectively, while Halle is ranked 11th of all major German cities in terms of broadband coverage. 37% of urban households in Halle already have access to a fiber optic connection, giving the city a higher penetration rate than Ingolstadt, which ranks second in the sustainability index. Chemnitz and Potsdam also stand out with 4th and 15th place in broadband expansion.
Property prices in the eastern cities still remain below those in the west. On average, eastern German cities are united by a comparatively moderate residential rent of €5.41 euros per sqm in Chemnitz to €7.51 in Leipzig and €8.07 per sqm in Dresden. Even Potsdam, at €9.97 per sqm, is still just below the threshold of €10. In Rostock, Halle and Schwerin, but also in Dresden, Potsdam and Leipzig, rents have risen by 13% to 25% in the last five years. The average purchase price for a condominium in Halle is still €1,741 euros per sqm, while in Leipzig it is €2,223, in Erfurt €2,300, in Dresden €2,430, in Jena €2,664, in Rostock €2,783 and in Potsdam €3,458 euros per sqm.
The City Test survey was carried out for WirtschaftsWoche and ImmoScout24 by the Institut der deutschen Wirtschaft (IW) in Cologne, and analysed the 71 German cities with more than 100,000 inhabitants. Over 100 factors were evaluated for each city.
