If you’re expecting a raise, where might you be able to afford a home in Germany?
After all, if property prices in your part of Germany only went up a little in the last year, but your salary increased by a lot more – a home has suddenly become more affordable for you, even if the listed price for an average one where you live went up slightly. This is what’s mean by “real” property prices. It measures the bang you get for the money you actually earn – which could effect your homeowning chances.
Using calculations by the Hamburg Institute for the World Economy (HWWI), the 2024 Postbank WohnAtlas revealed that real property prices will probably increase only slightly over the next ten years or so – meaning that homes aren’t likely to get a lot more affordable – or unaffordable – than they already are.
Last year, most of Germany actually saw a fall in these real property prices. In 2023, only 16 of Germany’s 400 or so odd regions actually saw an increase in real property prices – that is where listing prices are going up at a faster pace than salaries.
In fact, some of the places that saw the biggest drops might surprise you – as charts compiled by The Local suggest.
The largest real property price drop was seen in Bayreuth in northern Bavaria – one of the world’s landmark spots for opera. According to the WohnAtlas, property there is almost 25 percent more affordable than it was at the end of 2022.
In a development that might surprise some, the Bavarian state capital of Munich – statistically the most expensive place to live in Germany – actually became a more affordable place to buy a flat or house last year. Even so, as another chart below demonstrates, it remains the most expensive place in Germany to buy property.
The national capital of Berlin, which has seen clear spikes in property values in recent years, even saw a price decrease in real terms – although by much less than seen in some other German cities and regions.
READ ALSO: Germany seeing price ‘turnaround’ on property market
How will prices trend overtime?
Although forecasts are by no means guaranteed, the WohnAtlas generally predicts that real property prices are likely to remain fairly stable over the next decade or so – with only slight increases predicted to 2035.
Again, that doesn’t mean listed property prices aren’t going to go up, but rather that wages should generally keep pace with home prices as they rise – argues the WohnAtlas.
Even in Germany’s largest and most expensive cities, property prices aren’t necessarily going to run away from your paycheque.
The city slated to see the largest real increase in property prices over the next decade is the Saxon city of Leipzig, which can expect a 2.2 percent increase in real terms over the next 10 or so years. At the same time, Germany’s traditionally more expensive cities will see their property affordability relative to salaries suffer only slightly. According to the forecast, Hamburg’s will barely move at all.
READ ALSO: What you need to know about buying property in Germany
Where is it already expensive?
Of course, just because a German city or region has become relatively more affordable – or at least not forecasted to see too much of a price increase relative to wages, that can be of little comfort to potential buyers who are already dealing with a lack of affordable property.
WohnAtlas data reveals clear disparities in overall price per square metre.
In what is unlikely to come as a big surprise for many, Munich remains by far the most expense place to purchase property in Germany, with the average price per square metre more than double Leipzig’s, for example.
Even if prices may be headed for stabilisation in Germany for a few years – the cost to buy still remains high in many cases.
READ ALSO: How much do you need to earn in Germany to buy a million euro home?
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