Prices Rise by 10% as Supply Falls
for New Build Apartments in Hamburg
Hamburg | 10.07.2014
Compared with 2013, the purchase price of new build apartments in Hamburg rose by 10% in the first half of the year. This represents a higher increase than in previous years - since 2010 annual price rises have averaged 4.7%. Compared with an average price of 4,131 €/m² of living space in 2013, the figure for the 1st half of 2014 was significantly higher at 4,550 €/m².
Higher Numbers of Building Permits Not Yet Reflected in New Build Apartments
Whereas a record figure of 2,291 new build apartments went on sale in 2013 (in 93 projects), available properties in the 1st half of 2014 fell below this level. As of 30.06.2014, 740 new build apartments (in 46 projects) had been noted. “From this it is obvious that the considerably higher number of building permits granted in 2012 and 2013 has not yet trickled down to the new build apartment sector,” concludes Frank Stolz, head of New Builds at property services provider Grossmann & Berger. “The level of demand still remains high and is further fuelled by exceptionally cheap interest rates. With mortgage rates at around 2% the monthly payments are often lower than rent charges.” In order to guard against higher rates for a follow-on mortgage, it is advisable to invest the interest saved in regular repayments on the principal.
Rent Cap Leads More Private Owners to Let New Build Apartments
If the plans now being discussed to impose a rent cap are implemented without further changes, they are unlikely to have much effect on new build properties. “Buyers seeking to let their new build apartment will remain able to set a rent that reflects demand. Because if a tenant moves out, his successor can still be charged the rent that was initially agreed. Buying new build apartments in order to let them will thus become increasingly popular with investors,” in Frank Stolz’s opinion.
The next property developers’ survey will be published in early 2015.