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ePaper created 2015-04-21, 16:47:46 | version 1.37.0
14 münchener Hypothekenbank eg | annual report 2014management report Property and Property Financing Markets Residential Property – Germany The German residential property market continued to develop fa- vourably in 2014. Demand for houses and apartments was once again strong, especially in the major metropolitan areas and growth regions where demand frequently exceeded the available supply. Demand was primarily driven by continuing low interest rates, which increasingly limited the choice of attractive capital in- vestment opportunities. As a result, private individuals were more and more likely to invest their money in real estate for use as their personal homes or for investment purposes. This is because hous- es and apartments are viewed as safe and stable investments. High demand led to a further notable increase in residential prop- erty prices. According to the Association of German Pfandbrief Banks (vdp), the price of residential property in Germany in 2014 rose by 5 percent over the previous year. This figure shows that the pace of rising prices has accelerated. A key reason behind this change is the strong 6.9 percent rise in prices seen for multi- family houses. Prices for single and two-family houses increased by 3.1 percent, and by 3.0 percent for condominiums. In addition, price rises were particularly influenced by the loca- tion of properties with the strongest increases noted for residen- tial property in top locations in major metropolitan areas. Last year, however, even mid-sized and smaller cities (so-called B and C locations) posted faster rising prices for properties. Prices rose faster for new buildings than for existing properties. This was also driven by rising construction costs for new buildings and by prices for energy-related investments, which are becoming increasingly more important. “Demand for residential property remained high and was primarily driven by the unchanging level of low interest rates.” By the end of November 2014 the number of building permits had risen to about 260,000, which represented a gain of more than 5 percent, although this increase was weaker than the same year-ago figure. Above all, higher levels of residential housing vdpResearch GmbH calculations based on information provided by vdp transaction databank As of: February 2015 Owner-occupied residential property Houses Condominiums Development of property prices in germany (year 2003 = 100) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 120 118 116 114 112 110 108 106 104 102 100 98 122 124 126 200320042005200620072008200920102011201220132014