
Rising real estate prices in Europe: Germany only in the middle of the pack
According to analyses by mortgage lender Dr. Klein, real estate prices in Germany have risen by 14 percent since 2015 – in Hungary, this price increase was achieved in just one year, according to Eurostat analysis. This makes Hungary number one in the Eurostat comparison when it comes to real estate price growth.
On average, prices in the EU rose by 4.2 percent. House prices in the second quarter of 2019 were compared with those in the same period in 2018. In Germany, this resulted in a price increase of 5.2 percent. This puts Germany just above the European average. In this country, prices are rising above all in the major cities and their surrounding areas. In Berlin, for example, prices rose by 9.3 percent for apartments and 12 percent for houses in the second quarter of 2019, according to Dr. Klein.
Prices in Eastern Europe are rising particularly sharply
A sharp rise in prices is not only evident in Hungary, but also in other Eastern European countries. Alongside Luxembourg (11.4%), Portugal (10.1%) and the Netherlands (8.3%), these countries are particularly far ahead in comparison. In Croatia, for example, prices rose by 10.4 percent, in Latvia by 9 percent and in the Czech Republic by 8.7 percent.
But despite high price increases, real estate in Hungary is still cheaper than in Germany. According to a study by the consulting firm Deloitte, the average price per square meter of apartment space is 1,323 euros. In Germany, it is more than twice as much: €3,405. However, Hungarians also earn significantly less than Germans. While you have to budget around five times your gross annual income to buy a property here, in Hungary it is eight times your income.
Price increases thanks to low interest rates?
Why aren't rising prices deterring buyers? After all, economic growth is slowing slightly in many countries. One reason could be the ever-lower interest rates. In Germany, for example, creditworthy property buyers can already obtain a ten-year loan at an interest rate of 0.4 percent.
Incidentally, prices fell in only one of the 29 countries compared: in Italy, prices fell by 0.2 percent. Here, real estate prices have not recovered since the global financial crisis of 2007. Real estate has been steadily losing value ever since.
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