So far the effects of the coronavirus pandemic have not resulted in resale prices for homes in Hamburg and the environs reaching a turning point. On the contrary, the market has proved remarkably robust. In its G&B Price Trend Grossmann & Berger forecasts single or even two-figure price rises in 2021.
Demand boosting prices
The G&B Price Trend predicts that in 2021 the price of existing single-family houses** in the environs will increase by 10.8 % compared with 2020. On average, existing condominiums/apartments* in the environs will cost 5.9 % more. Within Hamburg city limits the forecast increases are 3.9 % for houses and 6.5 % for apartments. “In 2020 there was a surge in demand for home ownership. As the series of lockdowns grew ever longer, people’s desire for a home of their own with more space inside and outside became ever stronger,” says Lars Seidel, managing director of Grossmann & Berger. Demand is further fuelled by the ongoing low interest rates. “Possibly, however, because it is so difficult to see ahead, lenders will once again begin to require greater collateral such as a higher down-payment or proof of a crisis-proof job,” Seidel adds.
House prices rising higher in the environs
In 2020 the coronavirus pandemic caused a surge in the price of existing houses/apartments and consequently the G&B Price Trend for 2021 forecasts an average price per square metre of living space of €5,300 for houses and €4,900 for condominiums/apartments in Hamburg. In the environs, prices will probably climb to €4,100/m² of living space for houses and €3,600/m² for condominiums/apartments. “In the “stockbroker belt” around Hamburg the square-metre prices of houses and apartments were almost identical until 2019. Since the start of the pandemic, prices have started to diverge and house prices in the environs have risen far more strongly”, comments Andreas Gnielka, member of the management board, residential properties stock, at Grossmann & Berger. “Because prices are lower and more properties are available, many clients have chosen to search for a home in the environs.”
Market less brisk due to partial lockdown
The number of residential properties on the market at normal prices is, however, lower than before the pandemic. “The restrictions on day-to-day life brought about by repeated partial lockdowns has slowed the market. In particular, older home-owners who are planning to move into age-appropriate housing are now postponing the decision to sell in view of the spread of infections,” says Gnielka in explanation. “Property transactions have become more complicated due to anti-corona measures.” If the restrictions are lifted and life returns to normal, the market could also revive somewhat. In some cases, the shortage of properties on the market has led to extremely rapid sales.
In the medium term the price curve could flatten
“So far the pandemic has not stopped prices rising or brought market processes to a halt in Hamburg. We expect this situation to continue throughout 2021. At present, however, no one knows what the medium-term economic impact will be. If the unemployment rate and the number of insolvencies in Germany rise, potential buyers could lose their enthusiasm and the price curve would flatten,” says Gnielka in conclusion.
It is planned to release the detailed market survey of the housing stock in Hamburg 2021/2022 at the start of the new year.
G&B Price Trend
Assessment of the attainable prices for standard properties, well constructed and fitted out, in good residential neighbourhoods:
* Standard condominium/apartment: vacant, 3 rooms, around 80 m² living space, 1st upper floor, lift (elevator), fitted kitchen
** Standard single family house: detached, with cellar, at least 130m² of living space, plot size typical for the location