Residential market survey Hamburg 2015/2016

Lower price increases expected for 2016 – 6% at most

Press release | Hamburg

Over the course of 2015 Grossmann & Berger registered year on year price rises of 7.7% for standard houses** and 6.3% for standard apartments* as defined below. The average prices paid in 2015 were €4,200/m² of living space for standard houses** and €3,400/m² for standard apartments*. “To make comparisons easier, we have defined what we call a standard property. Our G&B price trend is a new forecasting service that gives the owners and buyers of property in Hamburg and its environs information about the prices they can expect in 2016, provided that the market situation remains as it is now,” says managing director residential of Grossmann & Berger Lars Seidel, commenting on the new features of the 2015/2016 market survey of residential properties in Hamburg published today. “Prices will continue to rise in 2016, too. However, we predict that the increases will be slightly less than in the year before, at 4.8% for houses and 5.9% for apartments.”

Residential market survey Hamburg 2015/2016Residential market survey Hamburg 2015/2016
2015: Tight supply in the premium and single-family home segments
The situation regarding supply and demand in Hamburg has not changed in recent years. This is due to unchanged external factors such as population growth, low interest rates and the lack of investment opportunities. “This pushed buyer demand for property higher still, while the supply of residential properties at realistic prices remained low,” explains Andreas Gnielka, head of residential properties at Grossmann & Berger. “In prime locations and in the classic single-family house sector especially, there are very few properties on the market.” Over the course of 2015 rising prices due to short supply on the fringes of the city have considerably boosted demand in the “ring of affluence” around Hamburg. Demand for rented apartments fell slightly following the introduction of caps on rent increases. “For this type of property the current rent being paid is growing more important, because it greatly affects the potential for future returns,” explains Gnielka.

2015: The most affordable residential properties are in the south
As had been expected, Grossmann & Berger’s survey of average prices for a standard apartment* inside Hamburg city limits showed Harvestehude at the top of the scale, with buyers paying an average of €6,300/m² of living space, and Neugraben-Fischbek at the opposite end, with prices at €2,000/m². Standard town villas*** in Harvestehude and Rotherbaum were the most expensive, selling for €9,500/m² of living space. The least expensive standard single-family houses** were to be found in Harburg, at a cost of €2,000/m².

2016: Prices rising less steeply
Selling prices are set to rise further in 2016, but less steeply than in the prior year. In some regions prices for certain types of property could stagnate, above all in locations where values have increased by their full potential already. More and more excess demand will be shifted into the “ring of affluence”, particularly in the case of single family houses and semi-detached properties. “However, buyers see the “ring of affluence” as an option only if they can reach the city centre conveniently from their new property, and if there are local amenities and suitable child care facilities,” says Gnielka when asked about the criteria that decide a purchase. “If these criteria are met, we can expect to see growing demand and therefore price surges in the ‘ring of affluence’”. It remains to be seen what effect the influx of refugees will have on the property market in 2016. It is obvious that concentrating large numbers in specific areas will have an impact on local prices.

2016: “Rising Stars” have potential
“We believe that Rissen, Schnelsen, Bramfeld, Heimfeld, Rothenburgsort and Billstedt have very good development potential,” remarks Gnielka. “These are the districts that are either about to undergo considerable change, or the ones we expect to become more popular in 2016 because prices have so far been moderate by comparison with neighbouring districts.” Moreover, they meet buyers’ major criteria for a purchase; good amenities and shopping, excellent local transport services, and a wide range of recreation and leisure options. The experts at Grossmann & Berger predict that Rissen is the “rising star” that will see the highest increase in the price of a standard apartment*, with anticipated growth of 9.1% (to €3,600/m² of living space); standard single-family home** prices will probably rise most in Billstedt, by 7.4% to €2,900/m² of living space.

G&B-Price trend: Our estimate of the prices that could be obtained currently and in the medium term for the following standard properties:
* Standard apartment: 3 rooms, around 80 m² living space, 1st upper floor, lift (elevator), built-in kitchen
** Standard single family house: detached, with cellar, at least 130m² of living space, plot size typical for the location
*** Standard town villa: 2 to 3.5 stories, at least 150 m² of living space, lavish fit-out, garden

Permission is given to use the attached photo (source: Grossmann & Berger).

Caption: In 2015 Grossmann & Berger brokered the sale of this classic town house with secluded garden in the district of Hamburg-Winterhude.

The detailed market survey is ready for download on our website. The survey is available in English only.

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