Condominium prices climbed 0.61% in March, pushing annual growth to 1.39% as buyers increasingly pivot toward existing stock over new builds. This surge in the apartment sector coincides with a stark regional divergence in long-term value projections, where economic hubs like Bremen are expected to see steady growth through 2035 while structurally weak areas face real-term losses.
Existing homes are outperforming new construction
Demand is concentrating heavily on available existing properties. Existing single- and two-family homes saw the strongest year-on-year increase at 1.89%, despite a marginal monthly rise of only 0.26% in March.
New builds aren’t keeping pace. New single- and two-family houses remained virtually flat with a 0.01% decrease in March, stalled by persistent construction costs that continue to act as a brake on the sector.
Sebastian Hein, Director at Value AG, noted that rents in the last quarter grew 1.4%, a rate four times faster than the increase in purchase prices. This gap suggests a tightening rental market that isn’t yet fully mirrored in ownership costs.
Bremen and Oldenburg lead regional growth forecasts
The Institute of the German Economy (IW) projects a real annual price increase of one to two percent for residential properties in Bremen through 2035. Similar growth patterns are expected for the city of Oldenburg and the Wesermarsch district.
Other areas in the region won’t see the same momentum. The IW expects a mere zero to one percent annual increase for Delmenhorst, Bremerhaven and the districts of Oldenburg, Diepholz, Verden, Osterholz, Cuxhaven, and Rotenburg.
This isn’t a simple city-versus-country divide. Economic strength and proximity to major labor markets dictate the trajectory. Regions with stable economies and robust infrastructure are the only ones likely to sustain demand.
Structural weakness threatens property values in East Germany and Saarland
A clear national gradient is emerging. While metropolitan regions and their outskirts may see price increases exceeding two percent annually, structurally weak regions face a different reality: price-adjusted losses.
Parts of East Germany and the Saarland are particularly vulnerable. Rural areas with stagnant economic development are no longer safe havens for value preservation.
IW expert Pekka Sagner argues that housing policy must shift toward a regional approach. In these declining zones, the priority isn’t growth but securing and modernizing existing stock to prevent total decay.
Market adjustment follows the 2022 interest rate shock
Current trends are a delayed reaction to the 2010s low-interest era, which fueled an unsustainable price explosion. The sharp rise in construction financing rates in 2022 forced a market correction that is still playing out.
Sagner suggests the market won’t fully recover to 2022 price levels until 2027. For growth regions, the only way to dampen this persistent price pressure is through aggressive new construction, though high costs make that a difficult directive to execute.
Which regions are expected to see the lowest price growth through 2035?
The IW predicts only zero to one percent annual growth for Delmenhorst, Bremerhaven, and the districts of Oldenburg, Diepholz, Verden, Osterholz, Cuxhaven, and Rotenburg.
Why are existing homes more attractive than new builds right now?
High construction costs are braking the new-build market, leading buyers to concentrate their demand on available existing properties, which have seen the strongest year-on-year price increases.
