real-estate cycle, (2009 to 2017)
During the current real-estate cycle, i.e., from 2009 to 2017, house prices
have risen 80% in large metropolitan areas (A cities) and c. 60% in B and C
cities. In 2017, the number of newly completed residential units looks likely
to have risen to more than 300,000 for the first time in the current cycle; in
2018, it might climb to 335,000. However, assuming that there is demand
for at least 350,000 new apartments, the gap between supply and demand
should continue to widen in both years.
As demand remains high, upward
price pressure will continue. This suggests that prices and rents will rise
further in all major cities. Overvaluations are rising, and the risk of a price
bubble on the German housing market is increasing. The price uptrend is
likely to continue for several years to come, at least in most major cities in
Germany.
EU Forecast
euf:ba.18.j:143/nws-01