German holiday home prices to carry on rising

Investors are flocking to Germany’s tourism property sector to take advantage of rising holiday home prices on the back of increasing demand, according to the latest ‘Market Report for Holiday Properties in Germany’, published by Engel & Völkers.

The in-depth analysis of Germany’s holiday and second home market found that limited availability of holiday properties in many places, coupled with a continuing high level of demand, is causing prices to rise in the long term.

Engel & Völkers anticipates that prices for holiday apartments in very good locations will continue to rise in many of the 22 locations on the North and Baltic Sea, as well as in the German Alpine region, locations investigated in the report. The price trend for holiday homes in Germany’s most popular holiday regions is also set to continue.

“In more than a third of the places we surveyed, we are expecting to see further price rises in the prime locations,” said Kai Enders, Member of the Board of Engel & Völkers AG.

Properties in popular tourist destinations along the Baltic coast in the German state of Mecklenburg-Western Pomerania, in places like Rügen, Usedom and in Warnemünde, are now selling for as much as €14,000sqm (£11,000sqm).

“Prices in these locations can now be compared with those in Germany’s major cities,” Enders added.

German natives make up the majority of buyers of German holiday properties, but more overseas nationals are also now looking at the benefits of potentially investing in this sector of the German property market.

“Germany is becoming increasingly attractive as a place to own a second home. The availability of properties at top addresses is extremely limited however. In some places as a result, we are also seeing prices rise even for homes in close proximity to these hotspots,” said Enders (pictured), adding: “The markets in holiday regions are relatively small, with a limited number of properties for sale. The prices fetched can vary depending on the period under consideration.”

Another focus of the study involves exceptionally high asking prices for outstanding properties in prime locations, led by places like Sylt and Tegernsee where homes were on the market for up to €15m (11.9m) in Q1 2016.

Enders continued: “Outstanding properties are set apart by their special location, and their exceptional furnishings and amenities. Sale prices for properties of this calibre are quite independent of average prices on the market.”