Germany Residential Real Estate Market Size
| Study Period | 2020 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 372.77 Billion |
| Market Size (2029) | USD 499.84 Billion |
| CAGR (2024 - 2029) | > 3.06 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Germany Residential Real Estate Market Analysis
The Germany Residential Real Estate Market size is estimated at USD 372.77 billion in 2024, and is expected to reach USD 499.84 billion by 2029, growing at a CAGR of greater than 3.06% during the forecast period (2024-2029).
The sale of residential property in Germany amounted to around EUR 3.7 billion (USD 4 billion) in the first half of 2023. This represented a decrease of 53% compared to the same period of the previous year and, at the same time, the lowest turnover in the first half of the year since 2011. In the year so far, there have been four transactions with volumes of more than a quarter of a billion euros each. These transactions accounted for 62% of the volume. However, according to the experts, about three-quarters of the sales were below EUR 50 million (USD 54 million).
However, several new building sales have been made public over the last few weeks and months, with multipliers exceeding 25 to 27 times annual rentals. Due to such benchmark transactions, the players have more certainty about the potential first yields in buying or selling.
The vacancy rate is already low in many cities and may worsen. Experts indicate that the number of completed units will be around 200,000 in a few years. The federal government has set a new construction target of only half that amount.
The timing may be suitable for owners willing to sell, while a favorable window of opportunity opens for long-term investors wanting to enter the market. The presence of equity investors in the market who stabilize prices, particularly for smaller and medium-sized properties, may favor early sales instead of waiting and observing. However, prices could fall again when this capital is used.
Germany Residential Real Estate Market Trends
Strong Demand And Rising Construction Activities To Drive The Market
In March 2023, Germany approved the construction of 24,500 houses. According to Federal Statistical Office Destatis, it was a 29.6% decrease compared to March 2022. New residential permits issued since May 2022 have dropped by 10% compared to the same month last year and fell by more than 20% from October 2022 to January 2023.
Between January and March 2023, 68,700 residential building licenses were administered, a decrease of 25.7% from the same period the previous year. In the fall of building projects, the main factors are expected to remain the high costs of construction materials and the poor financial situation. The result is that building permits are issued for new homes and apartments in existing buildings.
The migration crisis and strong economic growth have added to the already high demand in the country in recent years. Consequently, the essential demand drivers are also considered foreseeable structural changes such as demographic effects. The supply side is the main obstacle to further growth in recent times. Nevertheless, some portfolio holders have been tempted by the political uncertainty surrounding new government constellations and intense investment pressure from numerous market participants to bring products onto the market in the latter part of this year.
The state of government finances strongly influences civil engineering, and investment in infrastructure is vital. The performance of the non-residential sector has remained modest due to a decrease in business investment in commercial, retail, and office buildings. In 2022, most of Germany's building companies reported stable or moderately improved results. Given the favorable demand environment, the profit margins are expected to remain stable, with no price wars currently foreseen. However, there are still problems with persistent material shortages and a lack of stability in input prices. It is hard for builders to pass on price increases to customers without contract escalation clauses. This could lead to a fall in the profit margin in the future.
Rising House Prices In Germany Affecting Demand In The Market
The German real estate market has generally experienced a steady rise in prices. Several factors, such as economic stability, weak interest rates, and high demand for housing in the cities, influence this. Real estate prices are growing, but the growth rate differs in each region and property type. In particular, major cities and suburbs are experiencing the most significant growth. Urbanization, population growth, and a strong labor market drive this growth in these areas.
According to industry experts, at the beginning of 2024, in terms of the balance between buyers and sellers, there is a higher demand than supply, especially in major cities like Berlin, Munich, and Hamburg.
The increase in property prices resulted from this imbalance. Given ongoing construction and development, improving the rate of new housing entering the market is necessary to meet today's demand, which will also increase price pressure. Due to their economic opportunities and the quality of life, cities such as Berlin, Munich or Frankfurt have grown considerably. However, this demand has increased housing prices, particularly in these metropolitan areas, which has raised affordability concerns.
Germany Residential Real Estate Industry Overview
There is a growing fragmentation of the residential property market in Germany, which is becoming more and more competitive. Overall developments in the property sector are expected to take place, which could increase the interest of additional investors due to increased spending on infrastructure, new government initiatives aimed at driving investments, and new project announcements. Vonovia SE, Deutsche Wohnen SE, SAGA Hamburg, LEG Immobilien SE, and Consus Real Estate are some of the leading players in Germany.
Germany Residential Real Estate Market Leaders
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Vonovia SE
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Deutsche Wohnen SE
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SAGA Siedlungs-Aktiengesellschaft Hamburg
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LEG Immobilien SE
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Consus Real Estate
*Disclaimer: Major Players sorted in no particular order
Germany Residential Real Estate Market News
May 2023: Vonovia and CBRE Investment Management agreed to sell five assets totaling 1,350 apartments in Berlin, Munich, and Frankfurt. Three of these properties are new constructions finished and operated in the rental category. The remaining two are under construction, with completion scheduled for the second and third quarters of 2023.
January 2023: Vonovia, a German real estate corporation, invested in Gropyus, an Austrian developer of ecological dwellings. Vonovia, which has 1.5 million German citizens, will lead Gropyus' EUR 100 million (USD 106.79 million) series B investment to develop the latter's prefab manufacturing factory in Richen, Austria. FAM AB, a stakeholder in Gropyus, is also investing.
Germany Residential Real Estate Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS AND DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.2.1 Strong Demand and Rising Construction Activities to Drive the Market
4.2.2 Rising House Prices in Germany Affecting Demand in the Market
4.3 Market Restraints
4.3.1 Weak economic environment
4.4 Market Opportunities
4.4.1 Recovery in Demand and Supply Demand Due to Government Initiatives
4.5 Industry Attractiveness - Porter's Five Forces Analysis
4.5.1 Bargaining Power of Suppliers
4.5.2 Bargaining Power of Buyers/Consumers
4.5.3 Threat of New Entrants
4.5.4 Threat of Substitute Products
4.5.5 Intensity of Competitive Rivalry
4.6 Government Initiatives and Regulations for the Residential Real Estate Sector
4.7 Residential Real Estate Buying Trends - Socio-economic and Demographic Insights
4.8 Insights into Size of Real Estate Lending and Loan to Value Trends
4.9 Insights into Interest Rate Regime for General Economy and Real Estate Lending
4.10 Insights into Rental Yields in the Residential Real Estate Segment
4.11 Insights into Capital Market Penetration and REIT Presence in Residential Real Estate
4.12 Insights into Affordable Housing Support Provided by Government and Public-private Partnerships
4.13 Insights into Real Estate Tech and Startups Active in the Real Estate Segment (Broking, Social Media, Facility Management, and Property Management)
4.14 Impact of COVID-19 on the Market
5. MARKET SEGMENTATION
5.1 By Type
5.1.1 Villas and Landed Houses
5.1.2 Condominiums and Apartments
5.2 By Key Cities
5.2.1 Berlin
5.2.2 Hamburg
5.2.3 Cologne
5.2.4 Munich
5.2.5 Rest of Germany
6. COMPETITIVE LANDSCAPE
6.1 Market Concentration Overview
6.2 Company Profiles
6.2.1 Vonovia SE
6.2.2 Deutsche Wohnen SE
6.2.3 SAGA Siedlungs-Aktiengesellschaft Hamburg
6.2.4 LEG Immobilien SE
6.2.5 Consus Real Estate
6.2.6 Degewo
6.2.7 Vivawest
6.2.8 Residia Care Holding GmbH & Co.
6.2.9 Wohnungsbaugenossenschaft Musikwinkel eG (WBG)
6.2.10 ABG Frankfurt Holding*
- *List Not Exhaustive
6.3 Other Companies
7. FUTURE OF THE MARKET
8. APPENDIX
Germany Residential Real Estate Industry Segmentation
Residential real estate refers to land and any buildings for residential purposes. The most common type of residential real estate is single-family dwellings. A complete background analysis of the German residential real estate market, including the assessment of the economy and contribution of sectors in the economy, market overview, market size estimation for key segments, and emerging trends in the market segments, market dynamics, and geographical trends, and COVID-19 impact, is covered in the report.
The German residential real estate market is segmented by type (villas, landed houses, condominiums, and apartments) and key cities (Berlin, Hamburg, Cologne, Munich, and the Rest of Germany). The report offers market size and forecasts for all the above segments in value (USD).
| By Type | |
| Villas and Landed Houses | |
| Condominiums and Apartments |
| By Key Cities | |
| Berlin | |
| Hamburg | |
| Cologne | |
| Munich | |
| Rest of Germany |
Germany Residential Real Estate Market Research FAQs
How big is the Germany Residential Real Estate Market?
The Germany Residential Real Estate Market size is expected to reach USD 372.77 billion in 2024 and grow at a CAGR of greater than 3.06% to reach USD 499.84 billion by 2029.
What is the current Germany Residential Real Estate Market size?
In 2024, the Germany Residential Real Estate Market size is expected to reach USD 372.77 billion.
Who are the key players in Germany Residential Real Estate Market?
Vonovia SE, Deutsche Wohnen SE, SAGA Siedlungs-Aktiengesellschaft Hamburg, LEG Immobilien SE and Consus Real Estate are the major companies operating in the Germany Residential Real Estate Market.
What years does this Germany Residential Real Estate Market cover, and what was the market size in 2023?
In 2023, the Germany Residential Real Estate Market size was estimated at USD 361.36 billion. The report covers the Germany Residential Real Estate Market historical market size for years: 2020, 2021, 2022 and 2023. The report also forecasts the Germany Residential Real Estate Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
What are the challenges faced by the German Residential Real Estate Market?
The challenges faced by the German Residential Real Estate Market are a) Rising construction material costs and financing difficulties b) The decrease in building permits is impacting the ability to meet housing demand c) Labor shortages in the construction industry
Residential Real Estate in Germany Industry Report
The Germany residential real estate market is currently experiencing significant growth and transformation. This market outlook indicates a shift towards sustainable and energy-efficient properties, with a notable demand for homes featuring solar panels, insulation, and smart technology. Urban living, particularly close to amenities, is becoming increasingly popular, especially among freelancers and remote workers.
The market size is expanding due to the stable economy and low interest rates, which attract both domestic and international investors. However, the market analysis reveals that housing shortages in major cities and macroeconomic factors, such as European Central Bank policies, present challenges. Despite these obstacles, the market forecast remains positive, driven by strong demand and sustainability trends.
The market segmentation highlights the focus on key urban centers with high demand, such as Berlin, Hamburg, Cologne, and Munich. The push for energy-efficient homes is supported by government initiatives, indicating a green transition that will shape the future of the German property market.
The market report provides detailed statistics, market share, size, and revenue growth insights. For those interested in a comprehensive analysis, 糖心vlog传媒鈩� Industry Reports offer a free report pdf. This industry outlook is further enhanced by the analysis of market trends, industry statistics, and industry trends, which show diverse investment opportunities.
The market growth is also influenced by the preferences for co-living and co-working spaces. The industry analysis points to a robust growth rate, with market leaders driving innovation in sustainable housing. The market overview and market predictions suggest continued expansion, despite the existing challenges.
The report example and research companies provide an in-depth review of the market value and market forecast. The industry research and industry reports offer a detailed market review, highlighting the importance of market segmentation and the role of industry sales in driving market growth. The market data and industry size presented in the report underscore the market's resilience and potential for future development.
