The German residential property market has been almost unaffected by the Covid-19 pandemic this year with around €15.8 bn of housing properties changing hands in the first three quarters of 2020, according to new research published by broker Savills.
This represents an increase of 29% year on year as well as a 29% increase on the five-year average.
Subject to further significant restrictions due to Covid-19, it is likely that this year’s transaction volume will exceed last year’s (€17.2 bn). This would amount to the second highest investment volume of all time, Savills said.
‘The fact that the German apartment market has come through the pandemic almost unscathed so far underlines the status of residential property as a safe haven, particularly in Germany,’ commented Karsten Nemecek, managing director, Corporate Finance – Valuation, Savills Germany. ‘Since demand for low-risk but stable investment opportunities is higher than ever, there is likely to be even more capital seeking product in the market going forward.’
Savills notes that the number of units transacted totalled almost 125,000 during the year to date, which is 39% higher than in the corresponding period last year. However, this is largely due to the strong first quarter and particularly the acquisition of Adler Real Estate by Ado Properties.
With a transaction volume of more than €2.6 bn, Berlin was once again by far the strongest market for investment, not least owing to the purchase of around 3,900 apartments by Swedish investor Heimstaden Bostad. However, the transaction volume in the German capital has fallen by 42% year on year. ‘The rental cap in the Berlin market continues to cause uncertainty. Some investors are, therefore, steering clear of the city for the time being,’ added Nemecek. ‘However, the lower competition among bidders gives opportunistic investors the chance to increase their market share.’
