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vdp property price indices: Prices of German residential and commercial properties rise further in the second quarter of 2016




- Multi-family houses: + 7.5%
- owner-occupied residential housing: + 6.3%
- Office properties: + 7.4%

- retail properties + 2.6%


German residential and commercial property prices once again increased in the second quarter of 2016. In some individual segments, prices even gained momentum. From April to June 2016 the vdp real estate index for the ¬German market as a whole, which is calculated on the basis of real transaction data, increased by 6.7% compared with the -corresponding quarter of the previous year. This development is primarily being driven by a severe shortage in the supply of investment properties.

“The sustained momentum in prices in the property market is continuing to fuel debate around potential negative developments. This is a legitimate concern, since monetary policy remains expansive and the cycle is well advanced,” says Jens Tolckmitt, Chief Executive of vdp. “At the moment, however, we cannot tell if the property boom is being driven by expansive lending or by purely speculative motives. In fact, a growing influx of people into metropolitan areas and positive trends in the economy, income and purchasing power are playing as great a role in investment decisions as the low interest rate level and lack of alternative investments. There are thus a number of variables, which can of course change. This needs to be taken into consideration in investment decisions, particularly as the property market is only able to react slowly to changes in demand.” 

For details on how the individual market segments developed, and for all index data on the individual vdp property price indices (2003-2016) including charts and tables, please refer to the attached publication.

vdp property price indices Q2|2016

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