Buyer demand for new-build apartments in Hamburg remains flat. “However, we have noticed that since spring there have been somewhat more queries, especially for smaller apartments at affordable overall prices in established locations,” says Garlef Kaché, head of the Hamburg new-build sector at Grossmann & Berger Immobilien. “Few people are interested in construction projects outside the popular parts of the city because, due to the increase in interest rates, they can barely afford to borrow the money needed.” Currently, demand is concentrated on buildings that are close to completion, because potential buyers much prefer to visit the site and ascertain the quality of construction for themselves. “Selling off-plan remains a challenge,because as a rule buyers are no longer prepared to share in the risks of the construction trade,” says Kaché. Developers able to complete their construction work irrespective of advance sales are thus at an advantage. However, increased construction and borrowing costs together with a considerable drop in demand continue to make life difficult for building developers. “The only positive sign is that construction costs have stabilized and it is therefore once again easier to calculate total capital requirements. We do therefore expect to see some interesting projects from developers with deep pockets coming onto the market in the second half of the year,” Kaché remarks.
Number of development starts sinks to a new low - decline of some 30 %
Berger & Grossmann’s half-year survey reveals that the number of construction starts for apartment developments has reached a new low. A mere 24 development starts were noted in the 1st half of 2024 in Hamburg. Year on year this translates into a reduction of about 30 %. In terms of the number of dwellings, the decline was even steeper. During the entire first half year only 354 new-build apartments were offered for sale. This figure is some 46 % below the previous half-year total.
Asking prices return to levels seen in 2021
In 2023 development starts were concentrated in expensive, central locations such as HafenCity, which led to a significant rise in the average asking price* across the city. An analysis of the projects which came onto the market in the 1st half year revealed that prices have settled back to those seen in 2021. The proportion of apartments in the top 23 city districts**, which Grossmann & Berger has identified as the 23 most sought-after areas, fell year on year from 55 % to 39 %. As a result the average price slipped appreciably, falling by 22 %. In Hamburg the average asking price* for new apartments coming onto the market was €8,440/m² at the end of the first half of 2024. The corresponding asking price in the top 23 locations fell by 33 % to €9,130/m², because the proportion of apartments in premium locations within the top 23 districts was relatively small. “We expect to see the asking prices of well-situated new-build apartments in Hamburg rising slightly over the new few months. In the medium term the low levels of construction activity will lead to even fewer properties for sale in Hamburg. In terms of demand, we expect to see the market revive, albeit at a low level,” forecasts Kaché.
* Average asking price:
Figure calculated in reference to all new-build apartment developments included in the survey whose construction start falls within a defined period
** Grossmann & Berger counts the following 23 parts of the city with the greatest new-build demand as the top 23 residential districts. Alsterdorf, Altona-Altstadt, Altona North, Bahrenfeld, Barmbek North, Barmbek South, Eilbek, Eimsbüttel, Eppendorf, HafenCity, Harvestehude, Hoheluft East, Hoheluft West, Hohenfelde, Lokstedt, Othmarschen, Ottensen, Rotherbaum, St. Georg, St. Pauli, Sternschanze, Uhlenhorst, Winterhude.
