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Outlook on the German housing market in 2017: Prices and rents in Berlin, Düsseldorf, Frankfurt, Hamburg and Munich

January 13, 2017
Region:
Munich remains the most dynamic German city when it comes to property, with its fast-rising population and historically low vacancy rate likely to lead to further price increases for many years to come. Further price rises are also expected in Berlin, although the main factors at play here are the very buoyant labour market and the fact that prices and rents are still relatively low for a European capital city. Of the German cities that were analysed for this report, Frankfurt has shown the lowest increase in prices in the current cycle. However, we are now seeing a Brexit effect, which is driving up prices for family homes in particular. Sluggish rent growth and a high level of construction activity are the most striking trends in Hamburg, which could make the city more sensitive to interest rate movements than other urban centres. The situation is similar in Düsseldorf, where the vacancy rate in the current cycle is relatively high for a large German city. For every city analysed here and for the overall German housing market we anticipate further price increases in the coming years. All the macroeconomic conditions that might signal an end to the cycle – such as a turnaround in interest rate policy, a massive expansion of supply and/or a slowdown in migration to Germany – are not yet fulfilled and it is likely to be several years before they materialise. Consequently, we expect rents and property prices in the major German cities and across the country to continue to rise sharply in 2017. [more]

More documents about "Germany"

238 (109-120)
April 4, 2016
Region:
109
According to our and consensus expectations Germany will record 4 years (2014-2017) of above potential GDP growth in an extremely narrow range of 1.5% to 1.7%, despite substantial shocks and massive swings in growth drivers. If growth breaks out, a downside move seems more likely than higher growth. The economic slowdown in the oil-producing countries due to the falling oil price also carries implications for the German economy in terms of its foreign trade. Although the overall effect is positive for the German economy, German exports to oil-producing countries remain under pressure. Capital spending on residential construction has been growing sluggishly in recent years. The main reasons are: a shortage of building land, increased regulatory hurdles in virtually all construction sectors, high construction costs and a lack of skilled workers in the construction industry. [more]
March 23, 2016
Region:
110
No? Then it may be worth taking a look at this digital technology and its potential areas of application. Alongside unsupervised learning algorithms and early cognitive systems, blockchain is an example of a digital technology that not only calls tried-and-tested business models into question, but is already turning them on their head. It may have its origins in the financial sector, but a universal spectrum of applications is beginning to open up both within and outside the fintech world. Those who have tried experimenting with digital technologies have quickly found that in many cases they make existing business models, processes and infrastructures noticeably more efficient and thus increase productivity. This has certainly been the case with blockchain, which is why it is a good idea for many decision makers (not only) in the financial sector to keep a close eye on developments and, above all, the various experiments with blockchain that are currently ongoing. Ideally they would experiment with various projects and pilot studies themselves in order to come up with their own ideas and try putting these into practice. [more]
March 22, 2016
Region:
111
In 2015, exports of German goods to the oil states declined by 7.4%. This was the third fall in a row. Growing exports to the United Arab Emirates (primarily aircraft) and Saudi Arabia prevented an even worse result. As oil prices will initially remain low, German exports to the oil-producing countries are expected to fall again in 2016. Our export indicator points to a decline of approximately 5%. Among the major German industrial sectors, mechanical engineering is likely to be hardest hit by falling demand from the oil states, as was the case in 2015. Overall, the significance of the oil producers as a market for German industry will continue to decline in 2016. [more]
March 3, 2016
Region:
112
Despite the challenging environment German exporters gained global market share in 2015. The year 2016 has not got off to an auspicious start, however. Our new “Export Indicator” points to a double whammy for German exports in 2016. The less favourable outlook for the demand and especially for the exchange rate impact looks set to slow export growth to around 3% in 2016. When analysing German exports, it is worth looking at sector-specific factors as they can play an even more important role than the macroeconomic environment. Overall, German industry faces a challenging year for exports. Further topics in this issue: House prices: Imminent return to normal, overvaluation likely; GDP growth 2016: More domestically driven & facing more downside risks; Merkel likely to weather even weak state election results. [more]
February 22, 2016
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Analyst:
113
Manufacturing output in Germany increased by 1.1% in real terms in 2015. Just over half of this growth resulted from 2015 having more working days than 2014. Among the main industrial sectors, pharmaceuticals (+4.3%) and automotives (+2.6%) recorded the highest growth rates. By contrast, the mechanical engineering and chemical industries suffered declines in production of 1.1% and 0.4% respectively. Mixed signals are currently shaping the outlook for 2016. For example, the slowdown in growth in major sales markets is being offset by a relatively high capacity utilisation rate in industry at the start of the year, as well as a positive trend in core orders. On the whole, we confirm our forecast that manufacturing output in Germany is not likely to do more than stagnate in 2016. Nevertheless, in light of global economic and geopolitical risks, as well as turmoil in the financial and commodities markets, a certain disturbing feeling remains to the effect that manufacturing output in Germany could also be worse than projected this year. [more]
February 5, 2016
Region:
Analyst:
114
The demand for electric cars in Germany remains low. Their share of total new car registrations was less than 1% in 2015. The clamour is increasing among policymakers in favour of stimulating demand with the aid of cash incentives. The argument is that if such incentives were high enough the market share of electric cars would indeed increase faster than has been the case to date. Nevertheless, there is a host of economic, regulatory and social policy reasons that argue against cash incentives. We continue to favour an integration of road traffic into the EU Emissions Trading System in order to limit the sector's CO<sub>2</sub> emissions [more]
January 28, 2016
Region:
115
After three years of high GDP forecast accuracy, we were off the mark by a substantial margin in 2015. The miss can mainly be traced to our assumptions with regard to oil, the USD, the magnitude of the refugee influx and a bit of bad timing, as the USD and oil saw a massive adjustment right after we had published our 2015 forecast. Last year’s imponderables are once again at the top of our list of forecast uncertainties for 2016. In this issue we also look at the wage round in 2016 and Chancellor Merkel’s asylum policy. [more]
January 11, 2016
Region:
116
The digital revolution is having a beneficial economic effect: new technologies are appearing at a faster rate. Of course, many of these technologies are still in their infancy and in some cases are still in the visionary stage, but they nevertheless hold unforeseen and lucrative potential. The race for digital technologies and appropriate monetisation strategies has been on for some time, especially among the large internet platforms. In the future, however, digital technologies will also find their way into traditional companies where they will gradually evolve into a comparative competitive advantage. This poses a number of advantages and disadvantages, which we urgently need to discuss. [more]
December 22, 2015
Region:
Analyst:
117
The manufacturing sector's stock of foreign direct investment (FDI) added up to some EUR 251.1 bn in Germany in 2013. This is equivalent to more than 27% of total German FDI. The data is collated on the basis of the specific business sector to which a German investor belongs. The statistics incorporate the following direct investments of domestic companies and private individuals: firstly, direct cross-border share capital or company voting rights of 10% or more. Secondly, stakes in foreign companies are taken into account if the directly and indirectly (that is via dependent holding companies) held share capital or voting rights exceed the 50% mark. [more]
December 16, 2015
Region:
118
The German economy was extremely stable over the course of 2015, although the volatile newsflow that ranged from the oil price shock, material euro exchange rate depreciation, “Dieselgate” right through to the refugee crisis could make one think otherwise. Driven by a 15-year high in private consumption growth economic output rose by more than 1 ½% in 2015, as already achieved in 2014. Economic growth is set to accelerate to nearly 2% in 2016, following a pretty stable trend over the course of the year. Private consumption should remain the most important growth driver. Public consumption will remain expansionary given the continued influx of refugees and resulting public spending. If refugees can be successfully integrated into the labour market, the refugee crisis will provide Germany's ageing society with a medium-term opportunity. [more]
December 9, 2015
Region:
Analyst:
119
As digital processes reshape commerce and social life, payment service providers are striving to offer users instruments to transfer funds in a way that matches this immediacy and ubiquity. With the payments market in such a flux, the ECB is pushing banks to provide at least one pan-European instant payment solution in order to prevent a re-fragmentation of the Single Euro Payments Area. However, instant services can be based on different technical set-ups: closed-loop, open-loop and decentralised payment networks. There is an opportunity for new technologies and providers to cater for user needs and win market share. Innovation in instant payments will not alter the economics of payments, though. Positive network externalities and economies of scale in electronic processing will probably lead to a consolidation around a few instant payment systems in the long run. [more]
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