Will the largest German cities become cheaper in 2017?
German real estate analysis again declare the "overheated" market, which can result in serious price drop in four major German cities — Berlin, Frankfurt , Munich and Hamburg. According to the specialists of the Zentraler Immobilien Ausschuss, ZIA this year there is still no threat for homeowners or investors, ZIA merely states that the probability of a significant decline in prices really high.
According to forecasts, the real estate prices drop are almost guaranteed in Berlin. The other three major cities of Germany — Munich, Hamburg and Frankfurt — listed as the centres with the high probability of the imminent decline in prices. However in their report the experts admit tha fact say that it is not contrary to the continuing boom in the German market and it will continue in 2017.
Examining the main trends of the market, experts have come to the conclusion that the decline in prices in these cities may reach about 30% over the next 4-5 years. This is due to the large gap of price growth and rental value - in Berlin the percentage gap between renting and buying has made 54% over the past six years. The experts say, if the lease prices began to depreciate, it will lower the cost of the object.
The second reason why the major German cities will possibly lower the rent and purchase prices relate to the situation with migrants - people prefer to settle in small towns, where rental price far below the capital. A third reason is probably in the increase of supply in the market — at the end of 2016 year, industrial turnover in Germany grew by 14.6% comparing to 2015.
