Cologne property market: Prices level out at a high
- Average asking prices of 1 million euros in Lindenthal
- Cologne most favourably priced city in “Top 7” national comparison
- Energy-efficient new buildings in particularly high demand
Hamburg, 18 August 2022. With a population of more than one million, Cologne is one of the largest cities in Germany – after Berlin, Hamburg and Munich. The cathedral city on the River Rhine is one of the most sought-after residential locations in the Federal Republic, thanks to the high quality of life it offers, and its importance as a centre of business, research and education. “In spite of interest rate increases and inflation, the level of demand for property in the city and the surrounding region is constant,” says Christian Sprave, Managing Director of Engel & Völkers Cologne, adding: “Real estate remains a crisis-proof investment with high value retention. There is also a lack of attractive and reliable investment alternatives. Energy-efficient new buildings in Cologne’s city centre are in especially high demand at the moment.”
Freehold apartments: City centre is most expensive and desirable location
Average asking prices for existing freehold apartments rose to 5,153 euros per square metre in H1 2022, marking an 8 percent increase over the previous year (H1 2021: 4,771 euros per square metre). Comparatively speaking, Cologne remains the lowest-priced of Germany’s “Top 7” cities. With average asking prices of 6,817 euros per square metre, the city centre ranks among the most sought-after and expensive addresses for freehold apartments, followed by the districts of Rodenkirchen and Lindenthal with average asking prices of between 5,279 and 5,607 euros per square metre. Premium properties in very good locations can reach top prices of up to 20,000 euros per square metre.
The segment for newly constructed freehold apartments saw an even sharper price rise – to an average of 7,037 euros per square metre in the first half of 2022, marking an 11.4 percent increase over the previous year (H1 2021: 6,317 euros per square metre). “We’re seeing a strong demand for new builds that are particularly well insulated and energy-efficient. These have become more important criteria for buyers, in light of the upcoming winter and uncertainty surrounding the gas supply. However, increased construction costs, labour shortages and global supply chain problems have meant that there have been delays in the completion of many new buildings. The availability of such properties on the market is hardly increasing at all as a result, and prices are levelling out,” says Christian Sprave.
Detached and semi-detached properties: Moderate price rises in H1 2022
Prospective buyers are also focusing their attention on features such as insulation, a fireplace and a high energy classification in the segment of detached and semi-detached houses. In the first half of 2022, the average asking price for detached and semi-detached houses in Cologne was 710,000 euros. This represents an increase of more than 9 percent compared to the previous year. As in the segment for freehold apartments, the districts of Lindenthal and Rodenkirchen, along with the city centre, were also the most expensive districts for detached and semi-detached houses: Here, the average asking prices ranged between 785,000 and approx. 1 million euros. Particularly exclusive residences in very good locations are currently on sale for asking prices of 1.75 to 7.5 million euros. “We are currently noticing a somewhat greater reluctance to buy, but assume that things will naturally settle back down to normal in the medium term. Real estate serves as a safe investment particularly in times of crisis. Not only as a long-term financial asset, but as a place to retreat with emotional returns too,” says Christian Sprave.
As was the case for city locations, market activity in the immediate surrounding region also remained stable in the first six months of 2022, buoyed by an ongoing desire among people to move to the countryside. Nevertheless, prices in these surrounding areas still remain below that of Cologne’s city locations. The highest prices were in Rösrath in the Rheinisch-Bergisch district, with average asking prices of 679,000 euros, followed by Pulheim and Bergisch Gladbach at approx. 630,000 euros.
Outlook: Prices expected to flatline in all locations
The experts at Engel & Völkers are anticipating a flatlining of prices in all Cologne locations for the remainder of the year. The month of June saw a slight drop in asking prices for freehold apartments in Cologne for the first time in years, due to the rise in interest rates. There could therefore be further moderate price corrections, especially in simple and average locations. “Many people acquired homes at top interest rates a few years ago and now have to budget more for follow-up loans. That said, the current interest rate is still relatively low when compared historically, meaning that seriously interested buyers now have opportunities to acquire properties that were more difficult to obtain in recent years due to the sheer number of buyer offers being made,” says Christian Sprave, summing up: “The current market climate is a special one, and long-term forecasts are difficult. Professional advice is therefore highly recommended to both sellers and buyers; it is absolutely necessary to be able to assess the current situation correctly.”
Other trends relating to purchase power and property prices in German cities can be found (in German) in the “Engel & Völkers Market Report for Residential Property in Germany 2020/21”.
Sources: Asking prices: VALUE Marktdatenbank, Gutachterausschuss Köln
Charming old villa on park-like property in Rondorf
Built in 1920, this old villa in Cologne Rondorf impresses with its classic architecture and is for sale for 2.3 million euros. The former rectory extends over a plot of around 1,523 square meters and offers plenty of privacy and space to relax. The 321 square meters of living space with eight rooms reflects the representative residential character of the property. A special highlight is the spacious park-like garden. (Image source: Engel & Völkers Köln-Rodenkirchen)
Modern old-building apartment in the Belgian Quarter
This bright two-room apartment with its own terrace is located in a listed former backyard-building from 1900 and is marketed by Engel & Völkers for 520,000 euros. In 2013, the property was extensively renovated using high-quality materials. Thanks to solid wood parquet flooring, listed wooden windows and an open kitchen-living area, modern design and old building charm are cleverly combined. (Image source: Engel & Völkers Köln City)
copyright: Image source: Engel & Völkers Köln City