Hamburg and the environs: Market survey of residential properties 2022

Demand for housing and range of available properties totally unbalanced

Press release | Hamburg

The Covid pandemic has put many developments on hold. It has not, however, put the brakes on rising prices for existing buildings in Hamburg and its environs. In fact, Grossmann & Berger expects average prices for properties in this segment of the market to increase further in 2022, rising by between 7.8 % and 11.9 % depending on location and type of property. The extreme scarcity of properties on the market is the main reason for soaring prices. A summary of price forecasts may be found in the Market survey of residential properties 2021/2022 in Hamburg and the environs which the property services provider G&B released today.

Normal properties are priced like collectors’ items

Soaring prices are especially noticeable in Hamburg’s urban hotspots. This is where surging demand hits the wall of vastly reduced availability. Such an unbalanced market means that normal properties are selling as if they were collectors’ pieces. Accordingly, the G&B Property Prices Trend is based on the assumption that the average price of a standard house* in Hamburg will rise by 8.9 % in 2022, and standard apartments** will be 7.8 % more expensive. These increases are partly fuelled by persistently low interest rates. “In view of such developments, there is a growing risk of a property price bubble in some parts of Hamburg, because in the city and its environs the link between purchase prices and rents is visibly weakening,” says Lars Seidel, managing director of Grossmann & Berger.

“However, the risk is lessened by the fact that buyers can pay large cash deposits and, thanks to lower mortgage rates, can afford higher purchase prices and repay their loans in instalments equal to those due five years ago. Moreover, German house buyers are very conservative borrowers who take long-term loans with fixed interest rates. And buyers who speculate on increasing values are fairly rare in this country because yields have plummeted. As a rule, they will not buy for returns under 2 per cent.”

Many house-hunting in the environs

However, Grossmann & Berger expects the steepest rise in house* prices to be in the environs – at 11.9 %. “Demand is still incredibly high and driven by the pandemic. However, the gap between what buyers want and what is on the market is becoming wider all the time,” says Andreas Gnielka, general manager, residential properties stock/letting/buy-to-let, at Grossmann & Berger. “More living space, a garden or balcony is simply not an option everywhere, especially when hardly anything is on the market.” Attracted by comparatively moderate prices and a larger range of properties for sale, many would-be buyers decided to widen their search to areas outside Hamburg. Mobile working opportunities have encouraged buyers to look at a greater area with longer commuting distances. The pandemic and changes in buyers’ search criteria are affecting the price of standard apartments** in the environs. According to the G&B Property Price Trend, this segment is 8.3 % more expensive. Gnielka observes that, “Now, buyers are most likely to be looking for spacious apartments suitable for a family.”

The market survey for residential properties in Hamburg and the environs 2021/2022 is available on our website. Click here to Download.

G&B Property Price Trend:
Assessment of the attainable prices for standard properties, well constructed and fitted out, in good residential neighbourhoods:
* Standard single family house: detached, with cellar, at least 130m² of living space, plot size typical for the location
** Standard condominium: vacant, 3 rooms, around 80 m² living space, 1st upper floor, lift (elevator), fitted kitchen

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