Demand increases house prices: Corona increases interest in homes

Thursday February 11, 2021

Demand increases house prices
Corona increases interest in homes

Despite the uncertain financial situation of many German citizens in the Corona crisis, interest in their own home is growing. This is the result of a new study by a Hamburg research institute. One and two-family houses have become significantly more expensive again due to the increased demand.

Homes in Germany have become considerably more expensive during the Corona crisis. The sharp rise in prices for single- and two-family houses is continuing, according to a recently published analysis by the Hamburg research institute F + B. According to this, single and two-family houses rose in the fourth quarter of 2020 by an average of 8.2 percent compared to the same period of the previous year.

This means that the prices for private homes rose even faster than those for condominiums (plus 5.3 percent). F + B had already observed this development in the second and third quarters. "We are of the opinion that the ongoing corona pandemic with the second lockdown since December has generated a sustained surge in demand here," said F + B boss Bernd Leutner about the current data.

Prices increased by 38 percent

Within five years – from the end of 2015 to the end of 2020 – one and two-family houses have risen by almost 38 percent, the analysis shows. This means that the prices for private homes rose faster than those for condominiums (plus 32 percent) during the period. "That is totally unusual," said Leutner. Because in the long term, condominiums, which are also very popular with capital investors, showed the greatest price increases. "The trend reversal is all the more important," said Leutner. The demand for homes was already strong before the Corona crisis, now it has increased even further.

Housing preferences have changed during the pandemic, report realtors and economists. In view of lockdowns and home offices, many people placed more emphasis on larger living space or outdoor space. The surrounding area of ​​large cities is becoming more popular. Most recently, data from the Federal Statistical Office showed that real estate prices did not rise most in the seven largest German cities, but in medium-sized cities outside of metropolitan areas and more densely populated rural districts.