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Senior Financial Consultant
Franzisca gives everything to make your property purchase in Cologne come true. She speaks English and French. Tell her about your project and she will be your reliable advisor. Right from the start.
Senior Financial Consultant
Tim is you fast and reliable partner for property finance in Cologne. He would love to hear your investment story and goals. He´s excellent English speaking and offers you best advice.
Get a more detailed overview of the city you are interested to invest. Rather than just looking at the city as a whole, go that bit deeper. Look at the different districts, look at the property prices and how they have been impacted by changes i.e gentrification that has taken place in the last years. This could be a good indication of the impact on the prices for the future.
A good indication of how realistic the property prices are, can be gauged on how long properties stay on the market before being sold. When properties are slow to sell , this could indicate room for negotiation! When properties are moving quickly, then you have to move quickly too!
Macroeconomic data can also provide some valuable information, particularly when you are looking at it from a ‘supply /demand’ perspective. Comparing the number of households in the district and the number of housing units available, is a good indicator how the property prices could develop. When the demand is higher than the number of properties available on the market, prices will rise.
The age of the inhabitants in a district will certainly have an effect on the property prices. Districts with a younger age group, those finishing their studies starting new jobs, starting families etc create a demand for cafes , restaurants, entertainment outlets, kindergartens, organic markets etc enabling new businesses for flourish. This in itself creates a further demand as more people want to be part of this and so, is then reflected in the property prices. Back to the supply/demand.
When a district has a healthy employment rate, therefore a stronger purchasing power, this will undoubtable have a more positive effect on the future potential for property.
The average net income in a district to some degree can be related with the employment status, but of course, a lower net income district with a high employment rate with young residents could also become a future area for development. Sometime we also have to take a longer term view.
By considering the number of people per household in a district, this will help determine which district best match with your requirements and investment strategy. Buying a 3 room apartment for a family could also work well for student sharing accommodation, if there is a high student presence in that district and the demand is there.
Thanks to an increase in the number of building permits granted, it was also possible to increase the construction surplus once again, ensuring that a higher level of completions can be expected over the coming years. The City of Cologne issued building permits for around 3,000 apartments in 2018, a 17% increase compared to the previous year (+440 apartments). However, it is unlikely that the number of completions will be sufficient to meet the growing demand for housing. Cologne’s population grew by 3.5% between 2014 and 2018 and although this was not as strong as the population growth registered in other major German cities, demand for housing in Cologne continues to rise, significantly exceeding supply. By setting a target of around 5,000 new apartments per annum, the City of Cologne is also r ecognising that this high level of demand cannot be satisfied by the current volume of completions. At least 25,000 new apartments are to be built by 2030 and due to the limited space potential in the city, the focus has shifted to re-densification and the conversion of commercial space to residential use. Therefore, even large-scale development projects in the city will only be able to offer a relatively small number of residential units and without mobilising large volumes of land or making significant housing policy interventions, the future provision of a sufficient volume of affordable housing will be difficult to guarantee.
Compared to last year’s trend, there has been a stronger rise in average rents, with the median rent reaching €11.90/ sqm/month, corresponding to a rise of 3.0% over the p ast 12 months. Despite falling short of the 5-year average (4.7% per annum), rents here have clearly risen at a higher rate than in Germany’s other major cities. Cologne also continues to register the highest average rental price level in North Rhein-Westphalia. While asking rents in the prime segment fell slightly (to €17.50/sqm/month), rents in the lowest price category developed above the average price trend. An analysis of rental price trends across the submarkets reveals a mixed picture: while there were strong increases in rents in the southwest of the city and especially towards the airport along the railway line, rents decreased slightly on the western city fringe.
Momentum in the market for condominium apartments in Cologne has picked up again with prices rising by around 10% over the past 12 months. This contrasts with price trends in the other Big 8 cities where growth rates have fallen short of the 5-year average. The average asking price is currently €3,860 per sqm. There was little momentum observed in prime purchase prices (€5,850 per sqm), which increased by 3.9% per annum compared to the previous year, while purchase prices in the lowest price category showed significant growth of around 20%. This is a clear indication that purchaser demand for residential property is shifting increasingly to the city fringes, which are now experiencing accelerated price rises. Purchase prices on the city centre fringe in Nippes and in Klettenberg (disused railway land), and on the southeast bank of the Rhein (Humboldt- Gremberg) and the eastern outskirts (Merheim and Neubrück) have increased sharply. Conversely, slight declines have been observed in the north and south of the city centre, in Lindenthal and in the south of Chor weiler.