Rent growth looks set to remain relatively subdued
Rent growth looks set to remain relatively subdued, as in the past few years. At
the moment, rents for re-let apartments are below EUR 11/sqm in Hamburg,
putting the city on rank 9 among the 126 cities observed by bulwiengesa (down
from rank 7 in 2016). If rent growth remains subdued in the long run, rents in
numerous smaller cities, such as Ingolstadt, Tübingen, Darmstadt or
Wiesbaden, might exceed those paid in Hamburg in the coming years.
The city expects population growth to remain slow and forecasts a small increase in the
number of inhabitants by 52,000, to 1.84 million, by 2030. This, too, indicates
that rent and price growth should remain low. Overall, Hamburg seems to have
a good chance of continuing its successful residential policy. This suggests that
apartment and house prices in Hamburg are driven mainly by the low interest
rate environment.
The city’s market might therefore be relatively sensitive to an
upcoming rate normalisation, whereas, in view of the large housing shortfalls,
other metropolitan areas might experience only a slight decline in both demand
for housing and the gap between housing supply and demand. For the first time
in the current real-estate cycle, interest rate increases might become a
substantial risk for Hamburg’s residential market in 2018, as the ECB is set to
terminate its bond purchases in the foreseeable future and economic activity in
Europe is strong or even very strong.
EU Forecast
euf:ba.18.j:165/nws-01