No decline in popularity of German real estate, rents up 5%

There are no indications that the German real estate market is overheating, the Handelsblatt reported, with the IW Business Climate Index, market sentiment remaining positive.

In the first quarter of 2017, the index climbed by three points to 50.4, a very high level, the report said. The rise has been driven, at least in part, by strong demand for German real estate from both national and international buyers, a fact confirmed by a new survey from CBRE. As the IW-Immobilienscout24 Index shows, Berlin is the most attractive location in Germany.

Meanwhile, according to the Federal Institute for Research on Building, Urban Affairs and Spatial Development (BBSR), rental prices for new apartment leases rose by almost 5% last year across the whole of Germany, climbing to an average of EUR 7.65/sqm, said a Die Welt report.

In large cities with more than 500,000 inhabitants, rental prices surged by 6.3% to an average of EUR 9.97/sqm. There was a more moderate increase in rural regions, although the average rental price of EUR 5.87/sqm is at a much lower base level.

In Munich, new apartment leases were concluded at an average of EUR 15.65/sqm, followed by Frankfurt with EUR 12.76/sqm and Stuttgart at EUR 11.93/sqm. The BBSR analysed listings for unfurnished rental apartments.