For the first time in nine months, the total index posted a slight gain in June. Prices for new homes and apartments only declined moderately and were more than compensated by a further increase in the index for existing homes. Over the coming month, the prices for all three index segments can be expected to stabilize.
Assessment and forecast
Real estate prices only declined moderately in Germany compared with other countries and are now stabilizing in line with economic indicators. Although a rapid recovery is not expected to occur over the short term, the total index has probably now bottomed out. In the conditions prevailing at present, we do not anticipate any further marked decline or even slump. The gap between prices for new and existing homes is still considerable, but will narrow further over the course of the year.
The HPX indices in detail:
Increasing again: Total index
June 2009: 286.69
May 2009: 286.49
April 2009: 286.93
The total index is currently at a level of 286.69 points, equivalent to an increase of 0.07% compared with the previous month (May 2009: 286.49). This marks the first increase following nine months of continual decline. The further stabilization is due to an increase in the values of existing homes. Year-on-year, the total index has, however, meanwhile dropped 2.77% compared with the same period last year (Total index June: 294.85).
Slightly declining: Prices for apartments ('apartments')
June 2009: 95.24
May 2009: 95.47
April 2009: 95.81
The decline in prices for apartments was again less severe in June than that witnessed in previous months. Following a decline of 0.24% compared with the previous month (May 2009: 95.47) the index is currently at 95.24 points. As such, prices for apartments are still 1.31% below the value witnessed this time last year (June 2008: 96.51 points).
Slightly declining: Prices for new single-family and two-family homes ('new homes')
June 2009: 101.88
May 2009: 102.21
April 2009: 103.63
In June, the decline in prices for new single-family and two-family homes was only 0.32%, bringing the index to its current level of 101.88 points. As a result, this index is now also posting a considerably lower level (1.31%) than witnessed this time last year (June 2008: 103.23 points).
Slightly increasing: Prices for existing single-family and two-family homes ('existing homes')
May 2009: 88.81
April 2009: 87.49
The index for existing homes posted a slight increase of 0.86% in June to its current level of 89.57 points. By year-on-year comparison, the index is therefore 5.82% lower than the level posted in June 2008 (95.11 points). Existing homes can be expected to recover over the long term.
Source: Hypoport AG