Frankfurt’s population is growing by c. 8,000 per year. The excellent labour
market situation stimulates demand, and supply is scarce. There is a
shortfall of c. 50,000 residential units. This means that the price and rent
increase in 2017 was not exclusively due to Brexit speculation. The market
will likely remain tight for years to come.
In Hamburg, prices for existing apartments have risen more than 70% since
2009. Compared to other metropolitan areas, rent growth is below the
average. It is dampened by comparatively strong construction activity and a
stable population. This suggests that the low interest rate level is probably
the main reason behind the uptrend in apartment and house prices.
Hamburg’s property market might therefore be more sensitive to interest
rate changes than that of other metropolitan areas. Since our baseline
scenario for 2018 foresees only small increases in mortgage rates, house
and apartment prices in Hamburg will probably continue to rise strongly this