Frankfurt’s property market
Frankfurt’s property market would gain considerable momentum even if only a
relatively small number of British companies and employees moved here.
Growth in employment in the wake of Brexit should stimulate demand for office
space, thus contributing to a reduction in vacancies and rising rents in the office
market close to the city centre. Following the referendum on Brexit, we have
raised our average rent increase expectations in the top segment to over 2%
per year by 2020 (double what had previously been anticipated for the 2018-
2020 period).
Bottlenecks have existed in the housing market for some years. A large demand
overhang – the shortage of housing runs to several tens of thousands of homes
– and a lack of undeveloped land are the main reasons why prices have risen
by around 25% since 2009. An additional Brexit effect could drive prices up
significantly. The rule of thumb in this context is the price per square metre
increases by EUR 25 for every 1,000 missing homes.
Assuming additional
demand for 5,000 homes, residential property prices will increase by EUR 125
or around 4% compared to current levels.
EU Forecast
euf:ba18.c:70/nws-01