The average sales price of single-family and duplex homes in the biggest cities in Germany varied between approximately 5,000 euros and 10,000 euros per square meter in the second quarter of 2023. Housing was most expensive in Munich, where the square meter price of houses increased from almost 5,400 euros in 2012 to 10,200 euros in 2023.
How have German house prices evolved?
House prices have been on an upward trend since 2010, but in 2020 and 2021, this growth rate was exceptionally high, with the nominal year-on-year change exceeding ten percent. Another way to examine the price growth is through the house price index, which uses 2015 as a base. In the second quarter of 2022, the houseprice index measured about 150 percent, which means that a house bought in 2015 would have appreciated by 50 percent during this period.
Is housing affordable in Germany?
Housing affordability depends greatly on income: high-income areas often tend to have more expensive housing, which does not necessarily make them unaffordable. The house price to income index measures the development of the cost of housing relative to income. In the first quarter of 2023, the index value stood at 120.8, meaning that since 2015, house price growth has outpaced income growth by about 21 percent. Compared with theaverage for the euro area, this value was higher.
