Frankfurt real estate prices fall again for the first time | hessenschau.de
Decrease in the price of condominiums: Real estate prices in Frankfurt are falling for the first time in years. The number of apartments sold in high-rise buildings has fallen particularly sharply.
Real estate prices in Frankfurt have fallen slightly. As the planning department announced in a press conference on Wednesday, prices on the Frankfurt real estate market fell in the second half of 2022.
A development that Mike Josef (SPD), head of the planning department, had not expected for “ten to twelve years”. In the first half of last year there was still a price increase in many sub-markets.
“Concern” about causes of the downtrend
The main reasons for the fall in prices are the uncertainty caused by the Ukraine war, the increase in construction costs and the sharp rise in interest on loans. “Although I’m happy about the calming of prices on the real estate market, I’m watching the causes and effects with concern,” said Josef, head of the planning department. Although many investors ended projects, sharply increased costs and interest rates on loans made it necessary to adjust the municipal subsidy conditions.
In the opinion of the chairman of the expert committee for real estate values, Michael Debus, rising construction costs and interest on loans in particular deterred potential buyers and investors. Demand is falling, so sellers are lowering their prices, he explains.
Market with high-rise residential buildings is particularly high
Specifically, the information for all condominiums in the portfolio in the second half of 2022 compared to 2021 showed a price decline of between 1.2 and 4.1 percent. Apartments in old buildings in locations close to the city center are currently fetching around 6,800 euros per square meter of living space. Newly built apartments were traded at an average of 8,280 euros per square meter and were – bucking the trend – an annual average of 0.4 percent above the previous year’s value.
According to the data, the number of apartments sold in high-rise buildings is down by 60 percent. The price there last year was around 13,000 euros per square meter. “Investors are cautious about starting new investments, especially in high-rise apartments because of the currently unforeseeable risks,” it said.
City will continue to encourage housing construction
Above all, annual price increases and increased interest on loans have meant that affordable apartments have shrunk in size from year to year: in 2010, the average apartment size of a new condominium was 97 square meters, according to the information, it fell to 74 square meters in 2021 . In 2022 it was only 65 square meters.
Head of department Josef emphasized that the city will continue to work on the designation of building land and on improved funding conditions, especially for the construction of affordable apartments. “The revision of the guidelines for subsidized housing means that the funds will double to 120 million euros,” emphasized the head of department.
End of further information
hessenschau update – the newsletter for Hesse
end of form