The expected onslaught of up to 10,000 Brexit bankers could further exacerbate the already tense situation on Frankfurt’s condominium market. Residential Real estate is often cheaper compared to London, making it more affordable for many in the financial industry.
Asking prices for condominiums have already increased by 10.7 in the second half of 2017 over the same period of the previous year, according to a study by real estate service provider Jones Lang LaSalle Inc. Compared to 2004, the increase stands at 99 percent.
"Any additional population, and even if it’s just a few thousand bank employees, will continue to drive buying prices in Frankfurt," Julius Stinauer, Associate Director Valuation & Transaction Advisory at JLL, said in an interview with Bloomberg. "London’s bankers are used to high prices, Frankfurt is cheap and housing is scarce, so Brexit could extend the upswing and increase the prices."
David Schmitt, managing partner at broker Engel & Voelkers in Frankfurt, tells a similar story. "We are seeing increased interest from London," he said. "Traditionally, the majority of buyers in Frankfurt work in the financial industry, with many international banks, insurance companies and their service providers being based here."
According to JLL, the average asking price for condominiums in Frankfurt in the second half of 2017 was 4830 euros per square meter. In the premium segment, the colleagues at Engel & Voelkers calculated an average starting price of 7,500 euros per square meter for 2017.
Real estate service provider Colliers International Group Inc. cites an average selling price of around 11.952 euros per square meter for a two-bedroom apartment in the City of London for 2017. Unlike in Frankfurt, prices have dropped here by 2.6 percent compared to 2016. Although the data from the two cities are not directly comparable, they give an overall impression of the market situation.
The most expensive residential property that Engel & Voelkers sold in 2017 in Frankfurt was a villa in Diplomatenviertel for 6.2 million euros, followed by a house in Holzhausenviertel for 5.5 million euros, two villas in Sachsenhausen for 4.1 million euros and 4 million euros as well as a newly build penthouse in Holzhausenviertel for about 3.7 million euros.
JLL attributes the recent sharp rise in prices in Frankfurt, even though they are still below those of London, to a lack of new supply and high demand as a result of population growth.
In 2016, 3670 new apartments were built in Frankfurt, according to JLL, while the company estimates the need for 10,000 apartments per year. "Sufficient building activity is not possible because building sites in Frankfurt are scarce and expensive," Stinauer said. The population grew by 9.4 percent between 2011 and 2016, while the housing stock had increased by only 3.9 percent, the data shows.
Frankfurt Main Finance - an initiative that promotes Frankfurt - expects the relocation of potentially around 10,000 jobs from London to Frankfurt due the Brexit, under certain conditions. Many banks had announced plans to relocate business activities, including Deutsche Bank AG.
Hubertus Vaeth, managing director of Frankfurt Main Finance, draws this conclusion: "The condominium market in Frankfurt will remain cheap by international comparison for the foreseeable future, and from a purely German point of view, it is considered to be a high-priced one."
سایت تابناک از انتشار نظرات حاوی توهین و افترا و نوشته شده با حروف لاتین (فینگیلیش) معذور است.