Hedonic house price index issued by Hypoport AG: July 2009 (DE)

The total index increased once more in July. This increase was driven, above all, by the index for existing homes. Prices are expected to stabilize over the coming months with prices for new homes, in particular, possibly posting a slight increase. The current situation still favors the acquisition of real estate in Germany.

Assessment and forecast
Prices for residential real estate are recovering and the general sentiment in the marketplace is improving. Existing homes, above all, have been witnessing consistently rising prices for three months now. For the first time, prices for apartments and new homes started following the same trend in July. The index for new homes can expected to increase further whereas prices for existing homes will tend to stabilize. Overall, the conditions for acquiring residential property are still very favorable: in light of the new debts that the government is currently incurring, the value of money can be expected to depreciate over the medium term.

Hypoport generally recommends purchasing residential real estate as mortgage costs are still low and there are very few investment alternatives that can match real estate in terms of both security and returns. However, advice should definitely be sought on all aspects of the purchase, and the locational factors, above all, should be considered.

The HPX indices in detail

Increasing: Total index

July 2009: 287.73
June 2009: 286.69
May 2009: 286.49

The index for all types of residential real estate increased for the second time running. Following a minor increase last month (June: +0.07%), the total index posted significant gains of 0.36% to 287.73 points in July. All of the individual indices increased at the same time, the first month this has happened since April 2008. The strong increase in the total index was mainly driven by the prices for existing homes and apartments. Since the index increased from a relatively low base, it is still 2.88% the value witnessed this time last year (July 2008: 296.26 points).

Increasing: Prices for apartments

July 2009: 95.61
June 2009: 95.24
May 2009: 95.47

Following nine successive months of decline, the index for apartments posted an increase for the first time again in July. It increased by 0.39% to 95.61 points. The index is still 2.49% lower by comparison with last year, in spite of this price increase.

Slightly increasing: Prices for new single-family and two-family homes

July 2009: 101.96
June 2009: 101.88
May 2009: 102.21

Prices for single-family and two-family homes increased in July for the first time since last March. The index posted a slight gain of 0.88% and is currently at 101.96 points. The index is therefore 0.96% short of the level posted this time last year (July 2008: 102.95 points).

Strongly increasing: Prices for existing single-family and two-family homes

July 2009: 90.16
June 2009: 89.57
May 2009: 88.81

July marked the third consecutive month in which the index for existing homes increased. The upward trend was strengthened by this 0.66% gain. At currently 90.16 points, the index is still 5.35% lower than the level witnessed this time last year (July 2008: 95.25 points).

Source: Hypoport AG

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