Shift in Trend for Prices of German Residential and Commercial Buildings
• Price Increases Nationwide Reported since January of this Year
• Prices still Undercut Last Year’s Level by 9% on Average
Berlin, November 13, 2008 – The prices for German residential and commercial buildings have perked up by 5.2 percent since the beginning of this year. Areas outside the conurbations saw moderate price hikes of 0.8 percent. Prices in Berlin have risen by two percent since January. This is the result of the latest Real Estate Price Indicator published by Estavis every four months. The most recent survey captures the mean sales price on the basis of actual rents paid for a total of 1,234 residential and commercial buildings new on the market.
Estavis Real Estate Price Indicator (May through August, 2008)
Source: Estavis database, including a total of 1,234 residential and commercial buildings in Germany
Prices still below Last Year’s Level
Compared to last year, the prices for residential and commercial buildings have dropped by 9.3 percent nationwide. In small and medium-sized cities, prices declined by a somewhat more moderate 8.2 percent. As a survey of 236 properties revealed, real estate prices outside conurbations currently stand at 12.3 times the annual net rent. As recently as August 2007, the multiple was 13.4 times. “Regarding the price development for residential and commercial buildings in smaller and medium-sized cities, we are currently witnessing a shift in trend. Prices continued to yield here through April, but since May, properties prices in these regions have been picking up. In May alone, prices increased by 3.3 percent, compared to the month before,” said Rainer Schorr, CEO of Estavis AG.
In Berlin, real estate prices dropped by nearly nine percent in August, compared to the same period last year. At present, the prices for residential and commercial buildings represent multiples of 15.6 times the annual net rent, as a survey of 439 properties showed. In August 2007, the multiple was 17.1 times.
Every month, Estavis receives offers for a number of properties that are reviewed using a special costing program. The Real Estate Price Indicator captures predominantly the price segment between 500,000 Euros and 10 million Euros The analysis focuses on residential and commercial property in small and medium-sized cities in Germany, and in Berlin.
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About ESTAVIS AG
ESTAVIS AG (ISIN: DE000A0KFKB3) is one of Germany's leading 'market makers,' mediating between private property sellers and institutional buyers of real estate portfolios. ESTAVIS approaches the acquisition of individual properties with a set of pre-defined criteria, pooling them into structured portfolios and selling these 'on demand' to institutional investors inside and outside Germany. For the identification of opportunities, ESTAVIS relies on an extensive network including more than 500 experienced realtors, among other professionals. Each financial year, ESTAVIS sells about 4,000 residential and commercial units to institutional investors inside and outside Germany in the context of portfolio transactions.
Beyond that, ESTAVIS Group is one of the leading providers in the fast-growing market segment of housing privatisation, with a volume of more than 1,000 housing units expected to be sold in the ongoing financial year.