“At the moment cash-rich potential buyers are increasingly interested in new-build apartments. Investors and home-buyers in the middle income bracket with little capital of their own are still holding back. Despite the falling number of new construction starts, supply is currently greater than demand,” remarks Frank Stolz, managing director of Grossmann & Berger with responsibility for the new-build sector. Lower demand also means that it takes longer to sell a property. “Some vendors are now prepared to discuss terms in order to speed up the marketing process. However, since there is little scope to charge less for new-builds, overall there is no change in the actual asking prices. In 2024 prices are likely to remain at their present levels,” Stolz explains. In respect of supply and demand, Stolz believes that, “The worst is over. Because lower interest rates seem possible we expect to see demand grow in the course of the year.” In view of the decline in building permits and construction completions, Grossmann & Berger expects the supply of new-build developments to remain low for the next few years. “The decline in construction activity in conjunction with a further rise in population is likely to lead to demand outstripping supply in the medium term. In addition, an increasing number of would-be buyers want energy-efficient new-build apartments,” says Stolz.
Construction activity shrinking appreciably
Grossmann & Berger’s research shows that in 2023 appreciably fewer new developments were started in Hamburg than in the year before. High construction and borrowing costs combined with stagnating or even falling purchase prices continue to present challenges to developers. Some projects were therefore shelved before construction started. During 2023 Grossmann & Berger registered 53 new construction starts – a year on year drop of 38 %. The number of apartments on the market fell by 28 % during the same period to 859 units.
Concentration in high-price locations pushes up average asking price
Year on year the proportion of apartments for sale in central, expensive locations such as HafenCity surged from 35 % to about 50 %. This shift in the type of properties on offer caused a significant increase in the average asking price* noted in Hamburg as a whole: On the basis of all development starts in 2023 the average asking price* was €10,370 in Hamburg. Due to the emphasis on expensive new-build locations this increase of 20 % does not, however, reflect actual developments in pricing structure. In particularly sought-after areas, which Grossmann & Berger classifies as the top 23 residential districts**, the average asking price was €13,290/m².
The G&B Property price trend for new-build apartments in Hamburg 2023/2024 is available to download from our website.
* 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.