The market for housing that forms part of Hamburg’s building stock remained difficult in 2023, loan interest rates did not stabilize to the degree expected. In the context of its G&B property price trend, Grossmann & Berger expects a similar economic environment in 2024 and further price reductions averaging up to 3 %.
“Prices should bottom out in mid-2024, provided that by then interest rates have settled at a stable rate below four per cent,” says G&B managing director Andreas Gnielka looking ahead to the coming year. Today Grossmann & Berger publishes its ‘Market survey pre-built residential properties Hamburg and the region 2023/2024’.
Property prices: “Covid winners” see greatest slide
From its high in 2021, the average buying price for standard properties in 2023 has dropped by some 20 %. “The biggest slide was the 24-per-cent fall in prices between 2021 and 2023 seen for housing stock located in Hamburg’s environs. During the pandemic there was a run on houses in Hamburg’s commuter belt leading to an especially steep price rise,” explains Gnielka. Above all, the price of housing stock has fallen in the case of large apartments outside Hamburg which compete with houses standing on fair-sized plots of land.
“In every location, if major modernization work is required to make existing properties energy-efficient, this has a significant impact on the selling price and the length of time needed to complete a sale. In 2024 therefore, one may reckon with average price reductions of some 25 per cent for unmodernized housing compared with refurbished properties,” says Gnielka.
Property demand: Brisker business in regions where prices are moderate
In the meantime, the vast majority of people wishing to sell houses or apartments have accepted the new price levels. Far more properties are available on the market. On average, it now takes more than six months to sell an existing property. Demand, by contrast, has slumped in view of high borrowing costs.
Since prices remain high, especially within the city of Hamburg, the market for its existing properties is sluggish. “We note considerably more demand in the “South” region and to the north of Norderstedt. Already-built homes sell in locations where an average wage-earner can afford to buy,” states Gnielka.
“Currently, there is little interest in properties rated in energy efficiency category F, G or H, unless there is the compensating benefit of a very quiet or unusual location.” Nowadays, potential buyers spend a long time examining what is offered. “The new economic environment has made the market far less transparent than it was even two years ago, and it is far harder for both owners and potential buyers to assess the situation. That applies to both prices and energy-efficiency issues. Therefore the two parties are increasingly turning to professionals for advice,” concludes Gnielka.
G&B property price trend
Assessment of the attainable prices for standard properties, well constructed and fitted out, in good residential neighbourhoods:
* Standard single family house: detached, with cellar, at least 130 m² of living space, plot size typical for the location
** Standard condominium: vacant, 3 rooms, around 80 m² living space, 1st upper floor, lift (elevator), fitted kitchen
Because in many locations prices have fallen by more than anticipated in 2022, Grossmann & Berger has lowered its stated prices for 2023.
The Market survey pre-built residential properties Hamburg and the region 2023/2024 may be downloaded from our website in PDF format (available in German only).