Price trends in the property market – Trends & Forecasts.
The property market operates according to the principles of supply and demand – but reacts more slowly than other asset classes. We explain how prices are determined, what influences value and how you can recognise when the market is overheating.
What causes differences in price trends?
Like any investment market, the property market is also subject to fluctuations in value. Rising prices can be driven, for example, by low interest rates and favourable lending conditions – but sometimes also by factors that are strongly location-specific.
If an airport is built nearby, prices may fall due to aircraft noise. If a neighbourhood’s image or quality of life improves – for example, due to an influx of new residents or a new park – prices will rise. Property is a sound investment, but fluctuations are possible in the short and medium term.
- Interest rates and financing terms
- Location factors – from noise to regeneration
- The district’s image and quality of life
- Local supply and demand dynamics
More than just a look at the market
An experienced estate agent takes far more factors into account when valuing a property than just market data.
Local knowledge
Familiar with local price trends and able to assess future developments.
A neutral view of the property
Assess how fitted fixtures and fittings or the layout of a room affect its value.
Document review
Land register (residential rights, usufruct) and, for let properties, tenancy agreements and net basic rents.
How long is a calculated value valid for?
A property valuation is always a snapshot in time: interest rates, demand and location factors are constantly changing. If your last valuation was some time ago, or if you’re planning to sell, it’s worth getting an up-to-date valuation – to ensure your asking price is truly in line with the market.
Spotting overpriced items – 3 questions
Three key questions can help you make an initial assessment of whether a market is overheated.
Are the prices reasonable?
High prices alone are not an indication of a bubble – what matters is how they relate to trends in rents and wages. Both are rising steadily in Germany; households spend, on average, 20–40 % of their net income on rent.
Is construction exceeding demand?
In conurbations such as Berlin, too few homes are being built – demand remains high (around 40,000 new residents per year). In rural areas, on the other hand, some new-build projects are being constructed without taking demand into account.
Are your loan debts too high?
Unlike during the US crisis of 2008, lending policies and capital adequacy requirements in Germany tend to be rather restrictive. Household debt stands at around 60 % of GDP – which is comparatively low.
Find out what your property is worth today.
We can determine the current market value of your property in a straightforward and non-binding manner – providing a reliable basis for your decision.
How to contact us
- ✆030 – 959 996 161
Here for you Mon–Fri - ⌂Döringstr. 7
10245 Berlin - ★Local market knowledge
Berlin & Düsseldorf
