In Hamburg’s 16
central locations* the average purchase price per unit in new-build apartment projects rose by 27% to €761,974 during the 1
st half of 2015. During this period 314 units in 17 projects came onto the market – figures that emerge from a survey by Grossmann & Berger. “Of these 314 dwellings, 46 are town-houses which formed part of three projects and are counted as privately owned apartments in our survey. That explains the huge rise in purchase prices per unit. By the end of the year the averagre price per dwelling will probably settle back to the levels seen in recent years, namely between €500,000 and €600,000,” says
Frank Stolz, head of the new-build department at Grossmann & Berger.
Growth of the average square-metre price returns to normalThe percentage rise in the average price per square metre in Hamburg was in the single-digit range during the 1
st half of 2015. Looking at the entire
area within city limits, the average price per square metre of a new-build apartment fell by a modest 2% to €4,698/m², whereas buyers of properties in the 16
central locations had to pay a good 3% more, with prices averaging €6,103/m² of living space. “This sideways drift is largely a consequence of how prices and interest rates have changed in recent years. In 2014 prices throughout Hamburg rose by 16% and in central locations the rise was even stronger, at 21%, while at the same time interest rates fell further. Since January of this year, however, mortgage rates have started to inch up again,” explains
Stolz.
Only a third of properties offered are in central locationsCompared with 2014, when 1,645 new-build apartments in 90 projects came onto the market throughout the city, the number of dwellings for sale in the 1
st half of 2015 was already about 62% of the prior year’s figure (1,018 units, 50 projects). Of these dwellings, only slightly more than a third (314) were situated in the 16
central locations. “When it came to apartment blocks, most of the building activity in the first half of the year was concentrated in the less central districts. Building land in central locations is scarce,” says
Stolz, summing up.
Outlook for 2015 as a whole“Unless mortgage rates leap up, we expect to see further increases in purchase prices. Many of the buyers are putting cash assets into real estate, preferably new-build properties. As long as interest rates are low, buyers are making use of their liquid funds and agreeing high repayment rates,” says
Stolz. “This practice ensures that when the fixed term of interest, usually ten years, expires, the buyer can be sure that the remainder is affordable, both in the case of owner-occupied and let apartments.”
* For this survey of new-build units, Grossmann & Berger counts the following 21 districts, conflated into 16 residential areas, as central locations: Alsterdorf, Altona-Altstadt/Altona North, Barmbek South, Eilbek/Hohenfelde, Eimsbüttel/Hoheluft West, Eppendorf/Hoheluft East, HafenCity, Harvestehude, Lokstedt, Othmarschen, Ottensen, Rotherbaum, St. Georg, St. Pauli/Sternschanze, Uhlenhorst and Winterhude.
The detailed survey of the property developers' market will appear in March 2016. The market report is available for downloading from our
website.
Permission is given to reproduce the chart (source: Grossmann & Berger).