Ralf Müller (Copyright)  Dachstuhl Dachwerk Dach
Economic Bulletin, 26 Jun 2017

Demographic projections for Germany indicate a drop in the population of many regions by 2030. This is likely to have an impact on the real estate market. Our report presents the result of a model calculation of asking prices for residential real estate in Germany up to 2030 based on market data ... more

Bernd Leitner (Copyright)  Reihenhaus Reihenhäuser Haus
Interview, 26 Jun 2017

Mr. Grabka, you have studied the effects of the demographic shift on residential real estate prices in Germany. What does population growth in the coming decades look like? We based our work on the population forecast coordinated by the German Federal Statistical Office (Statistisches Bundesamt), ... more

Lutz Wallroth (Copyright)  Berlin Spree Farbbild
Economic Bulletin, 26 Jun 2017

Although the housing prices in the 127 largest German cities have surged strongly in recent years, there is still no sign of a Germanywide housing bubble. In comparison with 2009, the price of condominiums has risen by around 55 percent. Single-family houses cost between 38 and 45 percent more in 20 ... more

Creativ-Foto (Copyright)  Logistik Containerschiff Frachtschiff
Economic Bulletin, 21 Jun 2017

DIW Berlin's economic forecast by Ferdinand Fichtner, Guido Baldi, Karl Brenke, Christian Dreger, Hella Engerer, Marcel Fratzscher, Stefan Gebauer, Simon Junker, Claus Michelsen, Malte Rieth, Thore Schlaak, and Kristina van Deuverden Germany’s economic output is now experiencing significant ... more

Anneke Volke (Copyright)  Shanghai Schanghai Schiffswerft
Economic Bulletin, 21 Jun 2017

Global economic output is expected to grow by 3.7 percent this year, and with a slightly stronger dynamic in the coming year; both predictions match the figures proposed in DIW Berlin’s spring forecast, even though the year started off somewhat weaker than expected. But overall, economic ... more

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by Christian Westermeier, Markus M. Grabka, in DIW Economic Bulletin

Demographic projections for Germany indicate a drop in the population of many regions by 2030. This is likely to have an impact on the real estate market. Our report presents the result of a model calculation of asking prices for residential real estate in Germany up to 2030 based on market data from empirica-systeme GmbH and a population projection from the Bertelsmann Foundation. Depending on the model specifications, it appears that real estate price polarization will increase by 2030. As with all model calculations, the results are subject to uncertainty. In the scenario presented here, we strictly focus on the demographic effect on real estate prices. According to our projections, in one-third of all rural districts (Landkreise) and urban districts (kreisfreie Städte), the market value of condominiums will fall by over 25 percent. This will also be the case for single- and two-family homes in one-quarter of all districts. Some regions in eastern Germany will be hit particularly hard by this development. In and around urban centers, however, the trend of rising prices is expected to continue. Our findings also show that the polarization of real estate prices might cause the inequality of wealth in Germany to rise slightly.

by Konstantin A. Kholodilin, Claus Michelsen, in DIW Economic Bulletin

Although the housing prices in the 127 largest German cities have surged strongly in recent years, there is still no sign of a Germanywide housing bubble. In comparison with 2009, the price of condominiums has risen by around 55 percent. Single-family houses cost between 38 and 45 percent more in 2016 than seven years prior, and building lot prices have risen by around 63 percent. The study at hand shows that concerns about a national housing bubble are largely unfounded. There may, however, be bubbles on the local level —primarily in the relatively small segment of new multi-story apartment buildings but also with regard to the valuation of undeveloped residential land. Given the situation, it seems appropriate that financial regulators have opened up more policy options in order to intervene when the market trend proves unsustainable. But because the measures were diluted in the federal legislative process, the need for policy-related action remains.

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