Prices too high: German real estate at risk of a bubble?
The term "real estate bubble" refers to a stagnant situation, so serious, that no immediate solution is allowed. Often it occurs when the real estate market is saturated, either on the demand side or on the supply side. In both cases, this is an often complex problem to manage. Despite the European real estate market, it now seems to have fully recovered from the crisis, however we note that the same does not apply to Germany.
After ten years of boom, brick prices continue to rise exponentially, so much so that potential buyers are greatly worried. The bubble is therefore likely to burst as early as 2020, and the problem is that this trend seems to continue unabated.
But since when did this worrying problem start?
As reported by the main statistics, the problem was already evident in the third quarter of last year. The most noticeable increase was the one reported in Hamburg. And experts predict further increases for this year.
But let's see in detail to analyze this situation. The price of condominiums, at a percentage level, has increased by 8%, reaching 2,040 euros per square meter. And the really worrying thing is that it is for the third consecutive year that these numbers occur.
But that is not all. In other metropolises such as Berlin, Munich, Cologne and Frankfurt, the threshold has reached 9%. (Always as far as condominiums are concerned).
Now let's turn our attention to houses. Again, forecasts announce a rapid 7% increase. It should therefore reach 2,600 euros per square meter. And if these values start to worry you, think that in the major realities mentioned above, prices will reach € 6,000 per square meter. Exactly more than double the German average. Suffice it to say that, in the eastern federal states, it is possible to buy a property with only 1,500 euros per square meter.
But in addition to this, another fundamental problem is represented by the abysmal gap between the prices relating to the rental contracts and those of the purchase contracts. For the lease, prices rose 3.6%, always taking into account last year. Despite this, favorable mortgages encouraged the '' brick race ''.
Generally, the price of real estate has doubled from 2008 to 2018.The only positive element has been represented by a real regeneration of the less inhabited areas. In fact, the latter, in order to enter the German real estate economy. From 300,000 apartments, it has gone up to 75,000 more units. In 2018, around 700,000 new projects were confirmed, to be carried out within the next five years.
So how will the German real estate market evolve? Will the housing bubble burst? It seems that the collapse, however, is near. But this does not mean that there can be no alternative solutions to appease this sudden increase.
For more news on the real estate market, stay updated on our portal!
After ten years of boom, brick prices continue to rise exponentially, so much so that potential buyers are greatly worried. The bubble is therefore likely to burst as early as 2020, and the problem is that this trend seems to continue unabated.
But since when did this worrying problem start?
As reported by the main statistics, the problem was already evident in the third quarter of last year. The most noticeable increase was the one reported in Hamburg. And experts predict further increases for this year.
But let's see in detail to analyze this situation. The price of condominiums, at a percentage level, has increased by 8%, reaching 2,040 euros per square meter. And the really worrying thing is that it is for the third consecutive year that these numbers occur.
But that is not all. In other metropolises such as Berlin, Munich, Cologne and Frankfurt, the threshold has reached 9%. (Always as far as condominiums are concerned).
Now let's turn our attention to houses. Again, forecasts announce a rapid 7% increase. It should therefore reach 2,600 euros per square meter. And if these values start to worry you, think that in the major realities mentioned above, prices will reach € 6,000 per square meter. Exactly more than double the German average. Suffice it to say that, in the eastern federal states, it is possible to buy a property with only 1,500 euros per square meter.
But in addition to this, another fundamental problem is represented by the abysmal gap between the prices relating to the rental contracts and those of the purchase contracts. For the lease, prices rose 3.6%, always taking into account last year. Despite this, favorable mortgages encouraged the '' brick race ''.
Generally, the price of real estate has doubled from 2008 to 2018.The only positive element has been represented by a real regeneration of the less inhabited areas. In fact, the latter, in order to enter the German real estate economy. From 300,000 apartments, it has gone up to 75,000 more units. In 2018, around 700,000 new projects were confirmed, to be carried out within the next five years.
So how will the German real estate market evolve? Will the housing bubble burst? It seems that the collapse, however, is near. But this does not mean that there can be no alternative solutions to appease this sudden increase.
For more news on the real estate market, stay updated on our portal!
