Purchase prices fall in Berlin in Q2, new-build rents continue to rise

According to data from the real estate platform Immowelt, prices for existing flats in Germany increased by 0.3 percent in the second quarter of 2024. Immowelt Managing Director Piet Derriks explained that property prices have now returned to pre-crisis levels: “We are seeing that the property market has recovered noticeably since the beginning of this year after two years in crisis mode, largely because access to financing has improved compared to the previous year”. With further interest rate cuts by the European Central Bank on the cards, Derriks expects prices to continue to rise throughout the year. However, he observed, price trends for existing apartments in individual German cities have been quite mixed. For instance, while Frankfurt am Main saw a 5.5 percent increase in prices in Q1, there was a 0.6 percent decline in Q2. Conversely, Stuttgart experienced a 0.8 percent drop in prices in Q1, followed by a 3.6 percent increase in Q2. Berlin, on the other hand, witnessed price decreases for two consecutive quarters, most recently by 0.2 percent. The reason for this is that the high price level fell much later and less sharply and is now more in line with the rest of the market. In contrast, rental prices for new-build apartments tell a different story. According to data from Immoscout24, Berlin has surpassed Hamburg and Frankfurt am Main to become the second most expensive city after Munich in terms of average rent, at EUR 19.62 per square metre.