27.06.2023
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Prices for residential properties on the North Sea coast are falling
Long sandy beaches, fresh sea breezes and the expanse of the Wadden Sea: the North Sea coast has all of this to offer and is correspondingly popular - both as a vacation destination and as a place to live. In recent years, prospective buyers looking for a new home have been particularly aware of this. This is because prices for residential property on the North Sea coast have continued to rise due to the sustained high demand. But what is the current situation? After all, the real estate market is also in a state of flux due to current world events and the resulting crises. For this reason, the VON POLL IMMOBILIEN experts have taken a closer look at the purchase price development¹ on the North Sea coast for single-family homes² in the districts and independent cities as well as on the islands* for the first quarter of 2023 compared to the same quarter of the previous year.
Daniel Ritter, Managing Partner at VON POLL IMMOBILIEN:
"Despite the already very high price level in some regions on the North Sea coast, real estate prices have continued to rise in recent years. That seems to be over for now. In all regions analyzed on the North Sea coast, prices for residential property in the first quarter of 2023 are falling or stagnating compared to the same quarter of the previous year," says Daniel Ritter, Managing Partner at VON POLL IMMOBILIEN. He continues: "This clearly shows that prospective buyers are no longer willing to pay any price due to the current interest rate situation and have to calculate more precisely what they can afford given the current situation. Nevertheless, we have noticed that the demand for residential property on the coast is still there. We assume that the market will level out again in the preferred waterfront locations in the course of 2023."
As expected, the North Sea islands are still the frontrunners in the price table. Accordingly, houses are most expensive on the North Frisian Islands - here, prospective buyers will have to calculate with an average of 12,866 euros for one square meter of living space in the first quarter of 2023. The main reason for the high price level is the island of Sylt, which is part of the North Frisian Islands. A separate analysis shows that Sylt already commands an average price per square meter of €15,348/m2, making it a strong price driver in the archipelago. While property prices on the North Frisian Islands as a whole fell by -7.5 percent compared to the same period last year, the figure for Sylt was as much as -14 percent.
Martin Weiß, branch manager at VON POLL IMMOBILIEN Sylt:
"It is well known that most of the properties on Sylt are vacation homes or second homes. Prospective buyers often purchase these properties as an investment, financed with borrowed capital. Since summer 2022, the real estate market has changed across Germany. Demand for properties on Sylt has also fallen significantly. However, when it came to a sale, the properties were usually paid for 100 percent with equity," says Martin Weiß, branch manager at VON POLL IMMOBILIEN Sylt. He continues: "However, property prices have mostly remained stable, even though there has been less demand. It remains to be seen how the market will develop in the coming months. In principle, real estate on Sylt is still considered a crisis-proof investment."
The second most expensive are the average square meter prices of 8,626 euros on the East Frisian Islands, which include Juist, Langeoog and Norderney, for example. This means that houses here are almost 33 percent cheaper than on the North Frisian Islands. In contrast, the price level on the East Frisian Islands has barely fallen - at -0.5 percent, property prices stagnated in the first quarter of 2023 compared to the first quarter of 2022.
Home prices on the mainland, on the other hand, are significantly cheaper: in the district of Friesland (mainland only), house prices fell by -4.4 percent to €2.227/m2, in the district of Aurich (mainland only) by -8.6 percent to €2,212/m2, in the district of North Friesland (mainland only) by -14 percent to €2.148 €/m2, in the district of Cuxhaven by -1.7 percent to € 2,145/m2 and in the district of Dithmarschen by -9.1 percent to € 2,119/m2. This means that the district of Nordfriesland (mainland only) recorded the second sharpest fall in prices in the ranking.
Square meter prices still below the €2,000 mark can be found in the two district towns of Emden and Bremerhaven, which are also the cheapest regions in the price ranking. Here, a house costs €1,974/m2 and €1,946/m2 respectively, prices have fallen by -9.4 percent and -6.9 percent.
Nils Onken, branch manager of the VON POLL IMMOBILIEN stores in East Frisia (Norden, Aurich, Emden and Esens):
"While supply has increased significantly, demand has decreased. This has also resulted in a longer marketing period from four to six weeks to currently five to eight months. We have reacted accordingly and reduced prices by 10 percent to 30 percent - depending on the location - and restructured our marketing measures. The market has developed from a seller's to a buyer's market," explains Nils Onken, branch manager of the VON POLL IMMOBILIEN stores in East Frisia (Norden, Aurich, Emden and Esens). He continues: "However, larger towns and cities with a good infrastructure have continued to prove particularly stable in value. We are observing the greatest fall in prices in rural regions. However, with increased interest rates and energy costs, it is usually not the purchase price that is decisive in the end, but rather the ongoing monthly costs."
Up and down of property prices on the Baltic Sea coast
The German Baltic Sea coast has experienced a real boom in recent years. More and more people are being drawn to the picturesque coastal towns and villages to escape the hustle and bustle of the big cities and enjoy life by the sea with more privacy. However, as interest in the Baltic Sea has increased, property prices have only gone in one direction and that is upwards. Since the late summer of 2022, however, the real estate market has turned around due to the sharp rise in interest rates. Property prices are stagnating or falling again for the first time in some regions. The VON POLL IMMOBILIEN experts have analyzed the exact situation and the property price development for single-family homes¹ in the districts, independent cities as well as on the peninsulas and islands* on the Baltic Sea coast and compared the development of purchase prices² in the first quarter of 2023 with the first quarter of 2022.
Daniel Ritter, Managing Partner at VON POLL IMMOBILIEN:
The most expensive single-family homes on the Baltic Sea coast are currently on the Usedom peninsula at an average of €4,303/m2. This is closely followed by the city of Rostock at €4,053/m2and the island of Fehmarn at €3,716/m2. While the price level on Usedom continued to rise by 7.1 percent compared to the same quarter of the previous year, prices per square meter in the first quarter of 2023 fell the most on the Baltic Sea coast compared to the first quarter of 2022 on Fehmarn at -18.5 percent.
"After business declined in September 2022 due to the rise in energy costs, high inflation and the increase in interest rates, we have seen a rise in demand again since the beginning of this year - albeit primarily in inner-city locations or directly on the Baltic Sea with a sea view. In the surrounding areas, previously almost on a par with the city, we are seeing the sharpest declines in demand and purchase prices," says Corinne Briesemeister, branch manager at VON POLL IMMOBILIEN Rostock. She continues: "Marketing houses in need of renovation is currently very difficult, even if the price-performance ratio is good. People are very concerned about energy and heating issues as well as rising interest rates. This has visibly minimized the purchasing power and number of potential buyers in our region."
In the first quarter of 2023, properties along the Baltic Sea will be cheapest in the districts of Vorpommern-Greifswald (mainland only) at €1,893/m2 and Rostock at €2,500/m2. Compared to the first quarter of 2022, house prices in Vorpommern-Greifswald have thus risen by 6.1 percent, the fourth highest increase in the Baltic Sea analysis. In the district of Rostock, on the other hand, prices per square meter fell by -10 percent.
Potential home buyers in the districts of Nordwestmecklenburg have to expect more than € 2,500/m2 to € 3,000/m2 .522/m2, Schleswig-Flensburg at €2,566/m2, Vorpommern-Rügen (mainland) at €2,585/m2, Rendsburg-Eckernförde at €2,812/m2 and in the district town of Flensburg at €2,973/m2. Interestingly, prices per square meter in Vorpommern-Rügen and Schleswig-Flensburg will rise by 8.5 percent and 7.7 percent respectively in the first quarter of 2023 compared to the same quarter of the previous year. Sustained demand is driving prices here - primarily from prospective buyers for whom the price level in neighboring hot spot regions such as the island of Rügen or the Fischland-Darß-Zingst peninsula has become too high and who are switching to more affordable regions.
Robert Rothböck, branch manager of the VON POLL IMMOBILIEN stores in Kiel, Eckernförde, Plön, Neumünster and Rendsburg:
"At the beginning of the year, the real estate market in our region got off to a relatively quiet start. But since March, demand has increased significantly again. Although we are currently seeing fewer interested parties, they are very well prepared and have already been pre-checked by the banks. The average offer period is unchanged at two to three months," explains Robert Rothböck, branch manager of the VON POLL IMMOBILIEN stores in Kiel, Eckernförde, Plön, Neumünster and Rendsburg. He continues: "The region around the Schlei in the Rendsburg-Eckernförde district and the port city of Eckernförde continue to be very stable in value due to their location and particular attractiveness. The Schlei, a 40-kilometre-long estuary, offers a unique landscape and is a popular destination for water sports enthusiasts and nature lovers alike. The towns along the Baltic coast such as Schwedeneck, Strande, Schilksee, Heikendorf and Laboe are also very popular. As a vacation region, Hohwachter Bucht benefits from its well-kept stretches of beach and unspoiled natural areas."
Not surprisingly, the islands and peninsulas on the Baltic Sea coast continue to be among the regions with the most expensive prices per square meter. In addition to Usedom and Fehmarn, Rügen and Fischland-Darß-Zingst are also among the top 5. For houses on the island of Rügen, prospective buyers currently have to calculate with an average of €3,583/m2 and on Fischland-Darß-Zingst with €3,579/m2 . However, this means that the price per square meter is lower than in the first quarter of 2022. Property prices for single-family homes here fell by -2.8 percent on Rügen and -13.2 percent on Fischland-Darß-Zingst in the first quarter of 2023 compared to the same quarter of the previous year.
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 are 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 The data basis for the purchase price analysis is based on the average offer prices from GeoMap for the first quarter of 2023 and the first quarter of 2022 as well as adjustments by VON POLL IMMOBILIEN Research (2023).
² The term house or single-family home refers to the following house types in this analysis: Single-family house, two-family house, terraced house and semi-detached house.
* In the course of the analysis, islands and peninsulas were considered separately and only the mainland, excluding the respective islands, for the North Sea districts of North Friesland, Wittmund, Aurich and Friesland and for the Baltic Sea districts of Ostholstein, Vorpommern-Rügen and Vorpommern-Greifswald.
