The house – and apartment prices have risen in the year 2019, and in the first two months of this year, albeit not quite as strong as in the years 2017 and 2018. A current evaluation of the RWI – Leibniz Institute for economic research show that the increase in prices, especially of individual Metropolitan areas ran out. That was the development, before the Coronavirus arrived in Germany.
All the experts agree that the pandemic will also affect the real estate market. It is questionable how big the impact will be and how they are distributed on a regional basis.
real estate took years to loss of value after the economy crisis
To answer the question, take a look back on the financial and economic crisis: While the rental market recovered after the 2008 very quickly and the Neumieten in Germany increased since then continuously declined, the purchase prices for private real estate in the years 2009 and 2010. RWI Essen price development of private real estate since 2008, with house prices achieved in the course of the year 2014 the level of 2008. Until the middle of the last decade, there were only small regional differences in development, the real estate prices rose in Germany relatively evenly. The extreme increase in the price of apartments and houses began only after the year 2015 and was mainly driven by the increased demand in some Metropolitan areas, the home and the workplace, especially attractive. In particular, Munich, Stuttgart and Frankfurt. RWI Essen, changes in house prices from 2008 to 2020
Corona-crisis could make the surrounding area again popular
This is likely to change now for the time being, The stronger the effects of the Corona will be a pandemic, the stronger the attraction of these cities will decrease. Companies will create very few new jobs – these were created in the past few years, to a large extent in the urban centres. It is to be expected that wage growth will be lower. As a result, changing a small number of Employees their Job.
About the authors
Dr. Sandra Schaffner directs the FDZ Ruhr at RWI – Leibniz Institute for economic research. Larissa-click works as a scientist for the FDZ Ruhr at RWI.
in Total, the pandemic and the resulting collapse of the economy will lead to a lot of people will not only have less income, but also a greater fear of unemployment. The appetite for risk will decline, it is expected. According to small, the proportion of those who want to buy property or are ready to draw in a new Region. This effects the real estate prices in Germany decrease, but before all, there, where, until recently, the demand has exceeded the supply of real estate in the cities. RWI Essen comes in house prices to 2019
that the pandemic increases the attractiveness of country life to Living in the densely populated regions: keep your distance, playing sports or going for a walk is much easier than in narrow cities. In addition, the cultural and social offerings, which accounts for a significant part of the attractiveness of cities will not stand, probably for a longer time available.
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All of this should lead to the price development within Germany will align this year. The drifting Apart of the real estate prices between the cities and the other regions will be slowed for the time being. The prices in Munich, Stuttgart, Frankfurt could be approximated – as in the financial crisis – the German average, even a little. RWI Essen apartment rent 2019
Germany is attractive to immigrants
However, this development is likely to be only of short duration – this is also a finding from the financial and economic crisis. Because, similar to at the time, could also impact the current crisis in Germany is less strong than in other States. Although the Shutdown measures are far less drastic than, for example, in Italy, Spain and France, can cope with the German health system, the challenges at the moment. At the same time, significantly lower debt, allows for greater state aid, in particular, by a massive use of short-time work. On unemployment in Germany, the crisis has – at least until now – hardly had an effect.
economic researchers do not expect these reasons, both in the short and medium term, the country’s better economic development than in other major European countries. It would place Germany as the home and the workplace even more attractive when the crisis is over. Since 2010 – so since the financial crisis – Germany has a positive net migration, not only by Refugees: More people migrate to Germany than Germany to leave. If Germany can withstand the Corona of a pandemic better than other countries, could lead to an increase of the migration balance in the medium term. The apartment demand is expected to rise again – especially in the attractive regions. The pandemic will, therefore, lead to a short-term respite for the real estate prices. A permanent u-turn is not expected. Everything about the development of the Corona-crisis
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