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Property market: Upheaval on the residential property market: a trend analysis to 2010

Jun 03, 2005

According to Allianz Group economists, a number of megatrends will shape the property market in the coming years: socio-economic and cultural influences will have a major impact on price formation for residential property. Changes in the political backdrop will continue to have a substantial impact on the promotion of residential construction and property financing. These changes include the expected overhaul of the homeowner’s allowance, the offloading of property off company books and privatization at the municipal level. Arguments in favor of investing in property (for own use or rental purposes) include the current favorable interest rates, moderate price level, the long-term rise in value and the "property pension" on retirement.

The discussion on demographic change frequently focuses on the over-ageing and shrinking of the population. But this is short-sighted. WE will indeed see a shift in the age structure in the foreseeable future, but the number of households will actually continue to rise. The trend towards larger apartments will also continue. There are already marked differences in population trends in the German federal states. Overall, Germany is experiencing net immigration from abroad, but there is also a pronounced migration from east to west within the country. Going forward, the conurbations in particular will see their populations rise further. These places will continue to record an above-average rise in house prices. By contrast, the outlook for house prices in rural areas is bleak.

only available in German

Dr. Thomas Beyerle (DEGI Research)
David F. Milleker (Group Economic Research)
Christoph Partisch (Dresdner Bank Volkswirtschaft)

PDF (263 kb)

Wohnimmobilienmarkt im Umbruch: eine Trendanalyse bis 2010 (only available in German)