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Germany : residential investment market - Q4 2017

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Germany : residential investment market - Q4 2017

Transaction volume driven by rising prices – boom in developments. 

Residential property and residential portfolios changed hands for €13.7bn in 2017, representing an increase of 7% compared with 2016.

The number of residential units transacted decreased by 16%, while average prices rose by 27%. The rising prices are likely a consequence of the supply shortage but can also be explained by a rising proportion of development acquisitions (28% of the transaction volume) and expectations of further rental growth.

Some cities in the Ruhr region witnessed significantly higher transaction volumes. In Oberhausen and Mühlheim an der Ruhr, investment totalled more than ten times the average figure over the last five years. The increased activity from investors in these cities is likely a consequence of pressure to invest.

Many recently launched residential funds have only just started to build their portfolios and demand for residential property is likely to remain high across the board. With development activity also increasing, the transaction volume in 2018 is likely to exceed €15bn.

Source : Savills

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