Housing prices in Hamburg theoretically within reach for many. - Property prices in Hamburg have witnessed a decrease, making homes more reasonably priced for potential buyers.
In a significant turn of events, the affordability of real estate houses in Hamburg has seen a notable improvement since April 2023, making it easier for homebuyers to secure properties, according to a recent study by the Institute of German Economics (IW) and mortgage lender Interhyp.
The study, which compares monthly loan installments to household net income to calculate affordability, has placed Hamburg at the top among the seven most populous cities in terms of house affordability. The city now boasts an index value of 90, a 17 percent increase compared to the last study, indicating that the financing of a house is becoming more accessible.
The improvement in housing affordability in Hamburg can be attributed to a combination of factors. The federal government's introduction of measures to speed up housing construction approvals, known as the "construction turbo", has significantly reduced administrative delays and costs, making construction faster and cheaper. This, in turn, has led to an increase in housing supply, with Hamburg recording an addition of approximately 992,608 apartments, helping to ease the housing shortage and stabilize prices.
Moreover, the adoption of the "new Hamburg Standard" and the implementation of modular and serial construction methods have contributed to further cost savings in construction, while maintaining safety and comfort standards. Additionally, broader German housing policies provide low-interest loans and substantial grants for energy-efficient heating systems, making new construction more financially attractive and supporting affordable housing initiatives.
Despite Hamburg's high index value of 90, the study focuses on high-income individuals between the ages of 30 and 40, specifically the 70th percentile of the income distribution. For relatively well-off households in Hamburg, buying a house is still considered unaffordable, despite the city's improved housing market.
In comparison, Berlin and Munich have index values of 87 and 59, respectively. The reasons for this improvement, including slightly reduced interest rates, noticeable income increases, and a still moderate level of real estate prices, were previously stated.
The study publishes a bi-annual index to assess the affordability of single and two-family houses, and the national average for the index was just over 100 points in April of this year. The improvement in housing affordability in Hamburg, therefore, is a positive development in the German real estate market and a step towards addressing the chronic shortage of housing, especially in the lower and middle price segments.
The improvement in Hamburg's housing affordability can partially be credited to the adoption of community policies such as the "construction turbo," which reduces administrative delays and costs. This reduction, along with the implementation of the "new Hamburg Standard" and modular construction methods, has made house financing more accessible, falling under the umbrella of finance.
The implementation of vocational training programs aimed at the construction sector is a further step in ensuring the affordability of housing in Hamburg. By improving the efficiency and reducing the cost of construction, these programs could potentially boost house supply, contributing to future improvements in housing affordability.
