r instance, the land is extremely expensive in some countries due to the lack of available land, while in others land may be way cheaper than developed property. In Germany, developed projects such as apartment buildings, villas, etc. are in demand more than they can be supplied. Especially in the extended city and suburban areas, the demand for ready-to-inhabit spaces is persistently higher than the availability over the last few years; increasing the prices.
Increasing property prices in Germany
Major players in real estate predict that property prices and rentals in Germany will continue to grow in the upcoming years. The effect of a price hike will fall differently on different properties. For instance, in metropolitan areas, prices of commercial and residential buildings may increase while the prices of villas and single-family units may remain stable or decrease. From an investor’s perspective, residential apartments will remain an attractive and profitable investment.
The average increase in commercial and residential prices between the years 2015-2020 was recorded at 57%. However, the prices of some types of properties have increased more than others.
Condominium prices
The prices of condos range between EUR 5000-9000 per square meter. The table below showcases the price per sq.m in different cities in Germany.
| S.no. | City | Price in Euros |
| 1. | Munich | 9,053 |
| 2. | Starnberg | 7,500 |
| 3. | Frankfurt | 6,500 |
| 4. | Constance | 5,700 |
Single/two-family homes
The demand for single & two-family homes is higher in suburban areas and non-metropolitan cities compared to city centers whereas commercial complexes and buildings are mostly in demand in city centers. As such the price varies with the variation in demand as a simple economic rule of demand and supply.
| S.no. | City | Price in Euros |
| 1. | Starnberg | 2 million |
| 2. | Munich | 1.5 million |
| 3. | Bad Homburg | 1.4 million |
| 4. | Heidelberg | 1.2 million |
Prices of apartments, residential & commercial buildings
Residential and commercial buildings and apartments are mostly considered investment areas in the real estate sector. Often times people invest their life savings in this area instead of banks and other fixed profit schemes. The reasons are simple, mainly that the value for the dollar in real estate investment over time is multiple times higher than any bank or scheme can offer. The below chart shows the prices of commercial and residential buildings prices per sq. meter in different cities in Germany.
| S.no. | City | Price in Euros |
| 1. | Munich | 7,500 |
| 2. | Frankfurt | 4,000 |
| 3. | Stuttgart | 3,800 |
| 4. | Heidelberg | 3,700 |
Effects of the pandemic on property prices in Germany
There are two aspects to market dynamics; demand and supply. Looking from the demand perspective, the Covid 19 pandemic has not affected the real estate market to the extent this very sector is hit by in rest of the EU or the world at large. The government’s policy to lower the interest rates along with political emergency aid prevented a sudden and acute plunge in the buying power of the public.
Although the property market is known to be sluggish to react to political and economic turbulence, the far-reaching effects will only be visible with time.
