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.
As one of the population focal points in the Rhein-Ruhr metropolitan region, Dusseldorf and its neighbouring municipalities have little significant space potential left. As a reaction to the existing shortage of living space, increasingly alternative living concepts such as micro living are being introduced, especially in the central districts of the city. This is because demographically induced singularisation and the fact that work-related immigration is primarily characterised by smaller household sizes are leading to a steady rise in the number of singleperson households and therefore demand for smaller apartments. Nevertheless, the housing cost burden has also risen significantly in recent years, even in Dusseldorf. This has been recognised by the City of Dusseldorf ’s housing policies and some years ago it introduced its “Zukunft Wohnen. Dusseldorf” action concept which comprised various funding programmes. However, the rising demand can only be met if, in addition to previous housing construction programmes, the attractiveness of the periphery as a residential location is increased, for example through infrastructure improvements in order to strengthen links between the city’s labour market and the surrounding municipalities, thereby enlarging the catchment area.
Asking rents in Dusseldorf rose by just 1.3% to an average of €11.30/sqm/month between the first half of 2018 and the corresponding period in 2019, significantly below the 5-year average of 3.5%. The highest rental price rise of 4.7% was recorded by the lowest rental price category, while the new-build and the prime segments recorded significant declines (of -1.5% and -5.3%, respectively); in the first half of 2019, the rental price level in the prime segment was around €16.10/sqm/month. In an analysis of submarkets, there is a mixed picture in terms of the development of rental prices across the city. For example, rental price levels have declined across the city, especially in the city centre and suburban locations to the west, while rental growth is still being observed on the southern periphery and in the wider surroundings of the university.
Purchase price growth of 7.9% in the market for condominium apartments is above the 5-year average of 6.7% and suggests strong momentum. A phenomenon that is currently characteristic of many German metropolitan regions is particularly evident in Dusseldorf, i.e. because of the low elasticity of supply, the scarcity of supply in the markets with decreasing vacancy rates does not have a linear but an exponential effect on prices. The average asking price for a condominium apartment here is €3,950 per sqm. While a 1.4% rise was observed in purchase prices in the prime segment, they rose by a staggering 16% in the lowest purchase price category. Purchase price growth in the new-build segment has slowed down slightly since the strong price rises last year. At €5,990 per sqm, the average purchase price for a new-build apartment increased by 4.5% between the first half of 2018 and the corresponding period in 2019. The strongest growth within the city was observed on the southwest periphery, in Rath and along the axis between Toulouser Allee to the S-Bahn urban railway station in Oberbilk.
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Senior Financial Consultant
Wolfgang spent three years of his working life as a MLP Consultant in Central London. So you can expect an advisor with excellent English speaking skills und understanding for international clients. Wolfgang ist keen to help you with your mortgage project in Dusseldorf.