08.07.2024 • 7 min. reading time
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Property prices are gradually leveling off on the North Sea
The German North Sea coast continues to be a place of longing for many people. The main reason for this is the Wadden Sea - the world's largest contiguous mudflat and sand area, which is a UNESCO World Heritage Site due to its uniqueness. The fascination of the tides, extensive sandy beaches and the diversity of nature make the North Sea coast not only a popular vacation destination, but also a residential region. After a long period in which local real estate prices rose exclusively upwards, the real estate market on the North Sea coast also felt the effects of the war in Ukraine, broadly rising costs, inflation and the resulting interest rate hikes - prices fell. But what is the current situation? The VON POLL IMMOBILIEN experts have analyzed the development of property prices for single-family homes1 in the districts, independent cities and on the peninsulas and islands* on the North Sea coast and compared the development of purchase prices2 in the first quarter of 2024 with the first and fourth quarters of 2023.
Daniel Ritter, Managing Partner at VON POLL IMMOBILIEN:
"The real estate market on the North Sea coast is still under the influence of the past one and a half years. As in most regions of Germany, prices for detached and semi-detached houses have fallen noticeably. In nine of the twelve regions analyzed on the North Sea coast, average prices per square meter for houses in the first quarter of 2024 only fell by up to 9 percent in some cases compared to the same quarter of the previous year. Nevertheless, the figures show that the market is slowly stabilizing again and settling at a new reduced level. A look at the price trend in the fourth quarter of 2023 compared to the first quarter of 2024 shows that the price spiral is already turning downwards much more slowly - prices are no longer falling as sharply, in some cases they are even rising again slightly. This is an important signal for prospective buyers hoping for further price reductions - the phase of market regulation could soon come to an end."
Not surprisingly, prospective buyers on the North Frisian Islands have to dig deepest into their pockets. One square meter of living space cost an average of €11,704 in the first quarter of 2024. Although the highest prices in the ranking can be found here, the North Frisian Islands also recorded the largest price decline within the analysis - prices fell by -9 percent compared to the same period last year. However, a shorter-term look at the price trend from the fourth quarter of 2023 to the first quarter of 2024 suggests that prices appear to be gradually leveling off, as they tended to stagnate at -0.7% in this period. The island of Sylt, which has always been one of the most expensive regions in Germany, is partly responsible for the high price level on the North Frisian Islands. A separate analysis of the island shows that average prices here, at €14,424/m2 , are even significantly higher than on the North Frisian Islands as a whole. However, property prices on Sylt also fell by -6 percent compared to the first quarter of 2023.
Martin Weiß, branch manager at VON POLL IMMOBILIEN Sylt:
"The real estate market on Sylt has also changed since the interest rate turnaround and the broadly increased costs, the market is regulating itself downwards. We have more supply again and comprehensible prices are required to motivate well-funded prospective buyers. We need to find a healthy mix between locals and vacation property owners. There has been a lot of new construction on Sylt in the last two decades. In the future, there will probably be fewer new builds, if only because of the rise in construction costs. Property ownership on Sylt will therefore remain something special in the future because it is limited."
In second place in the ranking and with a gap of over €2,800/m2 to the North Frisian Islands is the next group of islands: On the East Frisian Islands, which include Norderney, Juist and Spiekeroog, a house cost an average of €8,833/m2. However, property prices on the East Frisian Islands rose slightly by 2.4 percent in the first quarter of 2024. Taking into account the analysis data from the fourth quarter of 2023 to the first quarter of 2024, it is clear that property prices on the East Frisian Islands are actually increasing again - prices rose by 5 percent during this period, even more than in the same quarter of the previous year.
Fig. 2: Purchase price development for houses on the North Sea coast in the first quarter of 2024 compared to the first quarter of 2023 (Graphic: von Poll Immobilien GmbH)
Significantly lower price level on the mainland on the North Sea coast: In the district of Nordfriesland (mainland only), a house in the first quarter of 2024 cost around €2.340/m2, in the district of Wittmund (mainland only) €2,203/m2, in the district of Friesland (mainland only) €2,095/m2 and in the district of Aurich (mainland only) €2,069/m2. Although these four regions are at a similar price level, prices for houses in North Friesland climbed the most within the ranking at 8.9 percent, followed by Wittmund, which recorded the second highest price increase in the analysis at 7.4 percent. In Friesland and Aurich, on the other hand, prices fell by -5.9% and -6.5% respectively in the period under review. However, in the short term - i.e. from the fourth quarter of 2023 to the first quarter of 2024 - property prices stagnated in the district of Friesland at -0.7 percent and in the district of Aurich at -0.3 percent. This is also a sign that average house prices there are slowly leveling off again.
Nils Onken, branch manager of the VON POLL IMMOBILIEN stores in East Frisia (Norden, Aurich, Emden and Esens):
"Demand at the start of the year was still somewhat sluggish, but this is not unusual in general. However, we are noticing that the market is slowly leveling out again and expect a significant increase in demand and a return to more normality on the market by the middle of the year at the latest. On the one hand, this can be seen in the marketing period, which is already approaching old values and shortening accordingly. On the other hand, the price trend has been stable since the beginning of the year - real estate prices are no longer falling, but rather moving sideways. Of course, the larger towns and cities in the region, which are characterized above all by their excellent infrastructure, are still particularly stable in value."
With average prices per square metre of between €2,000 and €1,900, prospective buyers in the district of Cuxhaven (€1.990 €/m2), in the district of Dithmarschen (€1,958/m2), in the independent city of Wilhelmshaven (€1,926/m2), in the independent city of Emden (€1,913/m2) and in the independent city of Bremerhaven (€1,910/m2). While the districts of Dithmarschen and Cuxhaven recorded the second and third largest price declines in the overall ranking at -7.6 percent and -7.2 percent respectively, average house prices fell by -6.6 percent in Wilhelmshaven and -3.1 percent in Emden. Particularly striking: while prices per square meter for houses in Bremerhaven fell by -1.8 percent within a year, they climbed by 1.8 percent in the shorter period under review, i.e. between the fourth quarter of 2023 and the first quarter of 2024. In the districts of Cuxhaven and Dithmarschen and the independent city of Wilhelmshaven, prices also stagnated or at least fell only slightly by -0.6 percent, -2 percent and -1.6 percent respectively in the shorter period under review.
The Wesermarsch district is the most affordable. Average house prices there were around €1,872/m2 in the first quarter of 2024 compared to the first quarter of 2023, with property prices here also falling significantly by 6.6 per cent.
The decline in property prices is slowly stabilizing on the Baltic Sea
The Baltic Sea is an inland sea that connects nine countries and enchants with its unique blend of cultural diversity, natural beauty and historical significance. Its coastline, characterized by gentle dunes, white sandy beaches and historic seaside resorts and small fishing villages, has not only captivated those seeking relaxation and nature enthusiasts, but has also been attracting the interest of property buyers for years. After a remarkable development and steadily rising prices, the real estate market along the Baltic Sea coast has been declining since mid-2022 against the backdrop of the war in Ukraine, inflation and rising costs. However, the current analysis shows that the market is slowly stabilizing and property prices are rising again slightly. But what exactly is the situation? The VON POLL IMMOBILIEN experts have analyzed the development of property prices for single-family homes1 in the districts, independent cities and on the peninsulas and islands* on the Baltic Sea coast and compared the development of purchase prices2 in the first quarter of 2024 with the first and fourth quarters of 2023.
Daniel Ritter, Managing Partner at VON POLL IMMOBILIEN:
Potential buyers looking for a house in the city of Rostock can currently expect the most expensive average price per square meter to be around 3,864 euros along the Baltic Sea coast. This is closely followed by the Fischland-Darß-Zingst peninsula at €3,835/m2 and Usedom at €3,813/m2. It is striking that property prices on Usedom fell by -9.3 percent in the first quarter of 2024 compared to the same quarter of the previous year. This is the sharpest fall in house prices on the Baltic coast in the analysis period. However, prices on Usedom appear to have bottomed out for the time being, as a comparison of the first quarter of 2024 with the fourth quarter of 2023 shows that prices have risen slightly or stabilized by 0.4 percent. In contrast to the sharpest price decline on Usedom, prices per square meter for single-family homes on Fischland-Darß-Zingst rose by 7.2 percent last year, bucking the usual market trend. This is the highest price increase in the current Baltic Sea ranking.
The islands of Rügen at €3,629/m2 and Fehmarn at €3,540/m2 also remain among the most expensive regions on the Baltic Sea with property prices of over €3,500/m2. However, while prices on Rügen have continued to rise slightly by 1.3 percent within a year, they have fallen by -4.7 percent on Fehmarn.
At €1,739/m2, the district of Vorpommern-Greifswald (mainland only) currently offers the cheapest prices for detached and semi-detached houses, the only region along the Baltic Sea coast with prices per square meter below €2,000. Compared to the first quarter of 2023, property prices in Vorpommern-Greifswald (mainland only) have fallen by a whopping -8.1 percent, the third largest price drop in the ranking. In the short term, however, recovery is also in sight here: compared to the fourth quarter of 2023, property prices have currently risen again by 6 percent.
Fig. 2: Purchase price development for houses on the Baltic Sea coast in the first quarter of 2024 compared to the first quarter of 2023 and fourth quarter of 2023 (Graphic: von Poll Immobilien GmbH)
In the lower price level between €2.000/m2 and €2,500/m2, prospective buyers can find a suitable property in the districts of Rostock at €2,336/m2, Nordwestmecklenburg at €2,468/m2 and Schleswig-Flensburg at €2,494/m2. While prices per square meter for houses in the district of Rostock fell by -6.6 percent compared to the first quarter of 2023, they fell by -2.2 percent and -2.8 percent in Nordwestmecklenburg and Schleswig-Flensburg respectively.
Potential buyers who do not want to pay more than €3.000/m2 for the new property of their dreams can also look around the districts of Vorpommern-Rügen (mainland only) with an average of €2,683/m2, Rendsburg-Eckernförde with €2,698/m2 and Flensburg with €2,885/m2. It is interesting to note that prices in Vorpommern-Rügen (mainland only) rose by 3.8 percent in the first quarter of 2024 compared to the first quarter of 2023, bucking the market trend.
Robert Rothböck, branch manager of the VON POLL IMMOBILIEN stores in Kiel, Eckernförde, Plön, Neumünster and Rendsburg:
"Demand is also picking up again in our region and transactions are constant. We are seeing a lot more movement again, particularly in the high-price segment from 500,000 euros upwards. Many people are taking the opportunity to find their dream property now at moderate prices or, if necessary, to change their place of residence. A good energy class is important here, but a parking space is also a must, especially for condominiums. On the Baltic coast, properties in the cities and in good and very good locations with water views or special properties - for example with thatched roofs - continue to be particularly stable in value."
In the middle of the price range are the city of Kiel at €3,111/m2, the district of Plön at €3,213/m2, Lübeck at €3,216/m2 and the district of Ostholstein (mainland only) at €3,387/m2. In all of these regions, house prices have fallen by between -4.5 percent and -8.2 percent compared to the first quarter of 2023. Only in the district of Plön is the price reduction lower at -0.5 percent. When comparing the fourth quarter of 2023 with the first quarter of 2024, it is again clear that the downward price trend is slowing down or, in some cases, rising again - in Plön by 3.3% and in Kiel by 2.4%.
Thorsten Claus, branch manager at VON POLL IMMOBILIEN Lübeck and Bad Schwartau
"Currently, smaller units in the area around Lübeck and the neighboring communities are being marketed - including condominiums in Bad Schwartau or older houses, mostly inherited properties that were about to undergo extensive energy-efficient refurbishment or even be demolished. While the development of inflation and interest rates has faded into the background for most buyers, energy efficiency and the need to renovate older buildings remain the most serious issues due to increased costs. In particular, the financing of a renovation is causing uncertainty. What needs to be done, what doesn't and what will it ultimately cost? This is exacerbated by the shortage of tradesmen. The regions of Timmendorfer Strand and Scharbeutz are still proving to be particularly stable in terms of value - especially the first to third rows facing the water."
It is also striking that property prices fell in the first quarter of 2023 in all rural and urban districts along the German Baltic Sea coast, which rank in the mid-range price range above an average of €3,000/m2 . These include Ostholstein (mainland only) with -9.1 percent to €3,576/m2, Lübeck with 12.6 percent to €3,504/m2, Kiel with -11.3 percent to €3,256/m2 and Plön with 6.1 percent to €3,228/m2.
1 In this analysis, the term house or single-family home refers to the following house types: Single-family house, two-family house, terraced house and semi-detached house.
2 The data basis for the purchase price analysis is based on the average asking prices for existing single-family houses* (up to and including 2020) from GeoMap for the first quarter of 2024 and the first and fourth quarters of 2023, as well as adjustments by VON POLL IMMOBILIEN Research (2024).
*In the course of the analysis, islands and peninsulas were considered separately and only the mainland, excluding the respective islands, was considered for the districts of North Friesland, Wittmund, Aurich and Friesland.
All data and graphics may be used and published with a reference to the following source: von Poll Immobilien GmbH (www.von-poll.com).
