German experts predict a slowdown in the growth rate of housing prices, but not a halt. The forecast for 2021 is plus at least 4 percent.
Rising home prices in Germany will continue despite the pandemic and the country’s falling economy, German news agency dpa quoted experts as predicting Saturday, Jan. 2. “The housing market in Germany is surprisingly resilient,” says Landesbank Hessen-Thüringen real estate expert Stephan Mitropoulos.
No downturn, he says, is expected, just a slight slowdown in growth: apartments and houses will rise in price by about 4 percent in 2021 instead of 5-6 percent.
Growth factors in real estate prices in Germany will remain in 2021
A global slowdown in economic activity, rising unemployment and shrinking incomes was previously expected to put an end to Germany’s multi-year real estate boom. But in the third quarter of 2020, real estate in Germany rose 7.8 percent from the same period the previous year, according to data from Germany’s Federal Statistical Office.
Experts from the Institute for Urban, Regional and Housing Research GEWOS (Institut für Stadt-, Regional- und Wohnforschung) point out that the factors influencing rising prices remain: demographics that support high demand for housing, a lack of land for construction, as well as low interest rates and a lack of alternative investment opportunities amid the instability of other markets.