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165 Billion Euros Worth of German Real Estate Sold in 2011

March 29, 2012

The transaction volume of commercial and residential real estate in Germany saw a year-to-year increase by 13.1% to 165.84 billion euros in 2011, according to a statistical projection by the IVD real estate association on the basis of the land transfer tax levied by the Federal Ministry of Finance. “Demand for German real estate continues unabated,” says Jürgen Michael Schick, Vice-President of the IVD (pictured). "Many domestic and foreign investors are looking for safe investments in the face of the ongoing currency crisis. Low interest levels, favourable prices and rising rental rates in many regions make a good environment for entering the market at this time."

The highest growth rates were seen in Hesse and Mecklenburg / Western Pomerania. In Hesse the transaction volume rose nearly 30% to 14.81 billion euros, marking the strongest relative volume increase of all West German federal states. In Mecklenburg / Western Pomerania sales were up nearly 34%. “This federal state is benefiting from the domestic demand for holiday homes,” says Schick. “With an overall volume of 2.70 billion euros it is still a minor marketplace, however.” Significant growth was also seen in Saxony (+25.60%) and Berlin (+23.05%). The capital and the two Saxon metropolises Leipzig and Dresden currently rank among the most attractive of all residential real estate locations, according to the IVD.  

Looking at absolute transaction volume, Bavaria ranks number one among federal states with 33.66 billion euros; a 13.3% increase over 2010. Following is North-Rhine Westphalia (NRW) with a real estate transaction volume of 32.71 billion euros. Ranking third is Baden-Württemberg with transactions totaling 25.13 billion euros.

Real estate transaction volumes, i.e., total sales figures, were calculated on the basis of all private and commercial real estate transactions subject to land transfer tax. Since the great majority of transactions are in fact subject to this tax, with exemption only of those subject to inheritance tax or gift tax and of share deals, this calculation method is a reliable way of determining annual real estate transaction volumes.

ICREA