The love of old buildings has its price

Spacious rooms, herringbone parquet and stucco on the ceiling – historical houses and apartments are in demand like never before. The prices are rising rapidly. However, the comparison of 80 largest German cities reveals surprising differences.

Living in an old building: this is a dream for many people.  But it is getting more and more expensive.

Dhe preferences of people are sometimes as different as they are. Some like the patina of the old and the story it can tell, while others like the clear chic and purity of the new. Of course, this is basically reflected in all areas of life, but is often particularly clear in the living environment – at least if the necessary change is available to be able to fulfill one’s own dreams.

Because the real estate boom does not stop at the aging buildings in the midst of the ongoing low interest rate environment. Magnificent facades, high ceilings, generous room sections, herringbone parquet and stucco on the ceiling – historical houses and apartments are in greater demand than ever before, especially in large cities.

The prices for these old-age properties have risen by an average of around 30 percent over the past three years, while the purchase prices for the other properties have increased by around 25 percent. The nationwide active broker Homeday has now established this in a comparison of real estate prices in the 80 largest German cities, each with more than 100,000 inhabitants.

The almost usual suspects Frankfurt, Hamburg and Munich are therefore among the most expensive German cities, also with a view to old buildings. But cities such as Freiburg and Heidelberg, which are very popular not only among students, came up with high prices, according to Homeday. It is not infrequent that the acquisition of historic residential property is significantly more expensive than that of more recent real estate, say the broker company’s experts. This applies in particular to popular architectural styles and construction methods as well as a good condition of the buildings.

All residential buildings that were completed before 1950 were summarized under the term old buildings. According to the information, the division was carried out according to the usual construction methods during certain time periods and is used, for example, in the Berlin rent index. In total, the calculations were based on more than 100,000 published sales offers for old buildings in the major cities examined for the years 2015 and 2018. A good 400 sources were used to compile the data, including real estate portals, national and regional daily and weekly newspapers and local advertising papers.

“The Bavarian capital of Munich is known to be the city with the highest real estate prices,” says Steffen Wicker, founder and managing director of the brokerage company Homeday: “The purchase sums for old buildings are no exception here.” Property buyers who are looking for historic residential property here have to pay for themselves expect an average of 9,370 euros per square meter. In good locations, five-digit amounts are not uncommon.

According to the analysis, sellers in Heidelberg, Hamburg and Frankfurt am Main charge more than 5,000 euros for one square meter of old building. The price level is similarly high in Freiburg, Ingolstadt, Regensburg, Stuttgart, Berlin, Düsseldorf and Cologne with average square meter prices of 3800 to 4800 euros. On the other hand, buyers in Bremerhaven, Chemnitz, Salzgitter, Hagen, Herne and Gelsenkirchen would find their old buildings much cheaper. Here, the square meter usually costs less than 1100 euros. According to the analysis, an average of around 2500 euros per square meter is required in major German cities

How popular old buildings are can be seen primarily from the rise in prices. According to Homeday, their prices have increased by more than a third in every fourth major city in the past three years. The offers in Kassel would have even increased in price by almost half. With price jumps of more than 40 percent, however, Düsseldorf, Augsburg and Lübeck also belonged to the top group.

On the other hand, it is surprising that in addition to Mannheim, Pforzheim, Fürth and Heilbronn, Halle (Saale), Gelsenkirchen, Rostock and Mülheim an der Ruhr are among the twelve most expensive cities with price increases of more than 37 percent since 2015. In contrast, the price development in places such as Bremen, Salzgitter, Oldenburg, Saarbrücken, Braunschweig and Münster is much more moderate, with rates of increase of 10.3 to 14.4 percent. Accordingly, no price declines were found in any of the cities examined during this period.

Less attractive Ruhr area

As a further sign of the rush, Homeday sees the fact that in many large cities the required purchase sums for old buildings are well above the average local property prices – this difference is greatest in Heidelberg at 55 percent. There were also high fluctuations in Munich (plus 32 percent) and Hamburg (29 percent).

It is also noticeable that in many cities in the Ruhr area it is cheaper to buy historical buildings and apartments than to buy newer properties. While in Berlin and Hamburg, for example, representative and high-quality buildings from the Wilhelminian era and the turn of the century shaped the cityscape, many workers’ and factory settlements that were built in the industrial heyday of the Ruhr area formed the foundation for the district cities, says Wicker and calculates because of continued high demand similar to that in the real estate markets in general, with the price of old buildings continuing to rise.

With many old buildings in particular, the purchase price alone should not be enough. Often a lot of money is needed for renovation and energy-efficient refurbishment with new heating and insulation, not just for visual reasons, in order to protect the environment and your wallet later.