LEG Housing Market Report NRW 2012
LEG Housing Market Report NRW 2 012 With HousingCostAtlas
LEG Housing Market Report NRW 2012 | 1
Dear reader, Anyone who has ever watched a small child growing up will know that three years can seem like half an eternity and bring along a whole host of changes. Three years have also passed since our first LEG Housing Market Report NRW. The housing markets in Germany’s most populous state have changed significantly in the meantime. This is the conclusion reached in the third edition of our report that we now present to you. On more than 280 pages, we have compiled and analyzed all relevant information for you regarding the 12 large and 42 small housing market regions in North Rhine-Westphalia.
LEG’s managers, from left: Holger Hentschel (HOO), Thomas Hegel (CEO) and Eckhard Schultz (CFO).
As in the two previous studies, we provide you with extensive information on the economic and demographic trends, changes in rents, housing costs and purchase prices, and the development in the number of residential units completed and construction permits issued. And for the first time, we have also integrated a separate section on new construction activity in North Rhine-Westphalia’s top 12 cities. The current data pool, which now covers three years, also allows us to draw initial conclusions regarding price developments in the 864 postcode areas. There were only a small number of rural regions left where this was not possible on account of a lack of data due to the low number of rental apartments on offer. No other property-related publication examines the development of the 54 housing market regions in North Rhine-Westphalia in such detail. The first two editions met with great interest and professional recognition from cities, a ssociations, market observers, analysts, fund managers, and not least, from specialist media and daily newspapers. For instance, more and more property valuation boards and municipal housing companies are referring to the first two editions, market researchers are using it in their day-to-day work, and the figures and analyses it contains are frequently quoted in printed media and radio reports. The analysis of the media response performed at the end of 2011 showed that 110 articles and reports had appeared, reaching an audience of around 57 million readers and listeners. The strong positive response gave us additional encouragement to continue with the report. The LEG Housing Market Report NRW 2012 once again demonstrates our knowledge of the housing market in North Rhine-Westphalia. We would like to take this opportunity to express our particular gratitude to our research partner CBRE, which compiled all of the data in its usual meticulous manner and evaluated it in conjunction with our regional and branch managers. We hope that the report makes for enjoyable reading and will support you in your day-to-day work. For German-speaking analysts and fund managers, the third edition is also available in German. Sincerely,
Thomas Hegel Management Spokesman, CEO
Eckhard Schultz Managing Director, CFO
Holger Hentschel Member of Management, HOO
LEG Housing Market Report NRW 2012 | 1
Duisburg
Score
15
of max.
48
Apartment buildings enjoy increased demand among investors
T
rends in the Duisburg residential property market in the past year were disparate. While asking rents for apartments were unchanged as against the previous year, the advertised purchase prices for owner-occupied properties were lower in some cases. By contrast, sellers of apartment buildings in Duisburg demanded significantly
higher prices than in 2011, with the difficult demographic situation in the city as a whole apparently having no impact on this market segment. Detached houses, owner-occupied apartments and land earmarked for development with a value of €624 million changed hands in Duisburg in 2011 – an increase of 3.5 percent on the prior-year figure.
Macroeconomic data Duisburg
NRW Germany
Year
Residents 489,559 17,845,154 81,751,600
2010
Population density (residents/km²) 2,103
523
229
2010
Population development in % –4.9
–0.9
–0.6
2000–2010
Population forecast in % –5.9
–2.2
–3.4
2010–2025
Households 240,512 8,562,837 39,708,452
2010
Household development in % –2.9
3.0
3.9
2000–2010
Household forecast in % –4.1
1.3
0.9
2010–2020
Purchasing power 85.4
101.1
100.0
2011
Per capita purchasing power in € 17,221
20,368
20,154
2011
Workers paying social insurance contribution 155,094
5,820,035
27,710,487
2010
Development of social insurance contributions –2.1
–1.5
–0.4
2000–2010
Source: NRW Statistics Office, Federal Statistics Office/CBRE (household forecast), Michael Bauer Research (purchasing power), compiled by CBRE
Gross domestic product per employed person in €
Unemployment rate in % of all employable civilians
80,000
18.0
70,000
60,513
17.0
13.1
16.0
60,000 50,000
15.0
40,000
14.0
30,000
13.0
20,000
12.0
10,000
11.0 10.0
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: NRW Statistics Office, compiled by CBRE
90 | LEG Housing Market Report NRW 2012
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Federal Labor Office, compiled by CBRE
Rent according to postcode for units in apartment buildings in €/m2/month 5.71 – 6.90 5.27 – 5.70 5.12 – 5.26 5.05 – 5.11 4.92 – 5.04 4.89 – 4.91 4.71 – 4.88 4.50 – 4.70
Economic structure The new local planning director in Duisburg, Carsten Tum, is promising “continuity” with respect to all of the projects that have been initiated. Two new furniture stores are planned in Duisburg, and the construction of a factory outlet center (FOC) in the north of the Ruhr city has already been resolved, although this could be put at risk by the election of a new mayor this summer. The aim is to retain the existing purchasing power while attracting new money. A new office area is also set for construction immediately next to the main railway station, with the newly installed planner-in-chief de-
scribing the plans as positive. When taking of Europe’s largest inland port. The duisport office this April, he also expressed his satis- Group, the local logistics giant, again refaction at the development of Duisburg city corded growth in revenue and goods turncenter. Following the opening of the “Forum over in 2011. Although the service sector is Duisburg” shopping center and the “Königs- on the rise and many former industrial argalerie,” the latest construction project is eas, such as the Landscape Park Duisburg the “Stadtfenster,” which will play host to North, have now been turned into green the Duisburg central library, the adult ed- spaces, Duisburg remains an industrial city. ucation center and various shops. How- Other key sectors for the local economy inever, the economy of the steel city benefits clude iron and steel, mechanical engineering from more than just retail: The logistics sec- and chemicals. Duisburg is also in demand tor has long played an important role, too. as an academic center: With around 37,000 The Ruhrort part of the city, at the conflu- students, the University of Duisburg-Essen ence of the Rhine and Ruhr, is the location is one of Germany’s 10 largest universities. LEG Housing Market Report NRW 2012 | 91
Duisburg
Rising prices for apartment buildings – but stagnating rents
F
ollowing the re-election of the mayor and the state elections in North Rhine-Westphalia, new players are controlling the fate of Duisburg. The population of just under 490,000 will undoubtedly be interested to see how things proceed with the large number of controversial new construction projects and the inland port. Two construction scandals, restaurant closures and the relocation of the tourist magnet Legoland to Oberhausen have delivered a blow to the attractive neighborhood on the waterfront, although it continues to enjoy great popularity as a nightlife destination for residents of Duisburg and beyond. While the local logistics industry is booming and warehousemen now are even said to be able to choose their employer, the unemployment rate remains high at 13.1 percent. Like many German cities, Duisburg has extensive debts. The city needs to save €75 million by 2021. As no area will be left unaffected by the cuts, the city even launched a portal where, for two weeks, residents were able to vote on the city authorities’ money-saving proposals. Despite the patchy economic and financial performance of the city in 2011, the property market proved to be extremely solid. According to the local Property Valuation Board, detached houses, owner-occupied apartments and land earmarked for development with a value of €624 million
Housing stock data
changed hands in Duisburg – up 3.5 per- ing by 25.2 percent. However, the absocent on the figure recorded in 2010. The lute figures show that the two markets number of purchase agreements rose from are worlds apart. In Dusseldorf, buyers 3,179 in 2010 to 3,426 in 2011, an increase are required to pay an average of €704 of 7.8 percent. A spokesman for the Prop- per square meter for an apartment in the erty Valuation Board described this devel- lower market segment – more than twice opment as “more than stable,” citing the as much as in Duisburg. Nevertheless, growth in sales and the reduction in the the upturn in house prices reflects the number of foreclosure auctions. clear growth in buyer confidence in the local property market and its prospects This year’s analysis by LEG and CBRE con- for future development. Furthermore, it firms the positive underlying trend for was not only simple buildings in comparthe Duisburg residential property mar- atively poor locations that enjoyed price ket. Nevertheless, the figures do provide growth in 2011: Sellers of apartment some surprises. For example, the sales buildings in the upper market segment market for apartment buildings enjoyed were also able to demand higher average an impressive upturn in 2011, with ask- purchase prices than in the previous year. ing prices across all location and qual- Asking prices in this segment increased by ity classes increasing by 3.9 percent. This an impressive 15.9 percent to €1,395 per means that apartment buildings between square meter. This development is unRahm in the south of the city and Walsum doubtedly also a source of satisfaction for in the north are now advertised for an av- the city and its property owners. Comerage of €597 per square meter. In addi- pared with the other major cities in North tion, there were unusually pronounced Rhine-Westphalia, buyers at the conprice movements in the upper and lower fluence of the Rhine and Ruhr pay relamarket segments. Asking prices for build- tively little for properties in this category. ings in simple locations and with lower- Only Gelsenkirchen can boast extremely quality specifications increased signifi- good apartment buildings that are more cantly by 16.6 percent over the course of affordable, with the average price per the year. Properties in this category now square meter coming in at €1,158. Howcommand €301 per square meter. Only ever, the current price growth could indiDusseldorf saw stronger price growth in cate that Duisburg’s residential property the same period, with asking prices for market was previously undervalued in simple apartment buildings in the state some areas and that it is now catching up capital of North Rhine-Westphalia ris- to other locations.
2004 2005 2006 2007 2008 2009 2010
Vacancy rate in %
6.4 6.2 5.2 4.4 4.4 5.5 n/a
Permits for new buildings
801
Finished apartments
866
Housing stock
257,340
Housing stock in apartment buildings
77.6 77.5 77.4 77.4 77.3 77.2 77.2
Source: empirica (vacancy), NRW Statistics Office, compiled by CBRE
92 | LEG Housing Market Report NRW 2012
690 668 257,866
747
505
591
884
258,152
258,948
377 502 259,178
597 365 259,289
652 340 259,457
Gap between simple and high-end properties expands
Prime apartments offered for more than €8 per square meter
Development on the Duisburg market for owner-occupied apartments was disparate in 2011. As in the rest of the major cities in North Rhine-Westphalia, the pronounced focus on security when making investment decisions meant that prices for apartments in the upper market segment increased. Sellers in Duisburg demanded €2,035 per square meter for such properties, 2.3 percent more than in 2010. This meant that the upward trend recorded in the previous year continued, with owner-occupied apartments in the upper segment enjoying popularity among buyers, leading to price growth of 1.5 percent. By contrast, interested parties in the lower market segment were somewhat more skeptical. Accordingly, asking prices for corresponding apartments in Duisburg declined by 5.1 percent in 2011, coming in at €324 per square meter. This not only sounds low, but also places Duisburg at the lower end of the scale when compared with the other major cities in North Rhine-Westphalia. The only location to offer even more affordable apartments in this market segment is Gelsenkirchen (€254 per square meter). This means that the gap between properties in the lower and upper market segments in Duisburg has become even larger. The areas with stable or rising apartment prices are primarily located in the south and east of the city.
There was little in the way of change for landlords in 2011, with rents across all location and quality classes remaining stable at €5 per square meter. However, asking prices for apartments in the lower market segment increased slightly by 0.5 percent. With starting rents of just €3.95 per square meter per month, however, Duisburg remains the second-cheapest city in all of North Rhine-Westphalia for pricesensitive tenant groups. Only Gelsenkirchen has a lower rental level, with simple apartments available from as little as €3.81 per square meter per month. The downturn in prices in the upper market segment in the previous year (‑5.5 percent) was less pronounced in 2011, with asking rents for high-quality properties falling by “only” 2.3 percent to below the €7 mark (€6.93 per square meter). Nevertheless, the high-end and simple market segments in Duisburg are worlds apart. At a postcode level, there is a huge discrepancy in rental prices: while simple apartments are available for well under €4 in the areas of Marxloh (postcode area 47169, €3.50 per square meter per month) and Obermeiderich (postcode area 47138, €3.44 per square meter per month), landlords in the prosperous area of Baerl (postcode area 47199) can demand up to €8.78 per square meter for luxury apartments – a figure
that is not far behind the Rhein-Sieg-Kreis (€8.95), which occupies fifth place in the scoring for the upper market segment. All in all, the city with the largest inland port in Europe remains one of the most affordable residential locations in North RhineWestphalia. This is underlined by an analysis of the trend for the past three years, as well as the current breakdown at postcode level. Only 10 of the 25 postcode areas have asking rents of more than €7 per square meter for apartments in the upper market segment, while only three sub-markets break the €8 barrier. In addition to the aforementioned high-end market of Baerl (postcode area 47199), these are Altstadt (postcode area 47051), which also includes the modern, fashionable and comparatively expensive Innenhafen neighborhood, and Großenbaum, Rahm (postcode area 47269). At the same time, simple properties can still be found for less than €4 per square meter in 11 of the city’s postcode areas. Although prices are moderate on the whole, the relatively low purchasing power in Duisburg means that residents have to dig deep to afford their rent. None of the individual sub-markets can boast monthly household purchasing power in excess of €4,000. On average, households are required to spend 19.7 percent of their average monthly purchasing power of €2,730 on rent. This compares with the figure of 18 percent for North Rhine-Westphalia as a whole.
LEG Housing Market Report NRW 2012 | 93
Duisburg
Housing cost
Housing data Postcode
Number of rental offers
Basic rent in Median bottom market basic rent in segment in €/m2/month €/m2/month
Basic rent in top market segment in €/m2/month
47051
719
4.29
5.71
47053
1,048
3.92
47055
726
4.16
47057
1,114
4.62
5.69
47058
697
4.50
5.70
7.50
47059
381
4.02
5.04
6.40
Vacancy 2009 in %1)
Apartment size Ø in m2
8.75
4.4
69
4.91
6.21
8.6
5.06
6.25
5.9
7.41
3.4
Basic housing cost Ø in €/month
Total Household Basic rent in Total rent in housing purchasing- % of house- % of housecost 2) Ø in power Ø in hold purcha- hold purcha€/month €/month sing power sing power
13.9
21.2
2,254
14.0
22.5
2,548
12.5
19.9
14.4
22.0
396
603
2,850
64
315
508
63
319
508
63
360
549
2,494
3.9
67
381
582
2,985
12.8
19.5
6.6
64
320
510
2,555
12.5
20.0
47119
760
3.97
4.88
6.45
6.1
69
336
543
2,371
14.2
22.9
47137
1,397
4.00
4.91
6.24
5.5
67
329
530
2,368
13.9
22.4
47138
690
3.44
4.65
5.61
6.4
65
305
501
2,730
11.2
18.4
47139
642
3.85
4.70
5.76
6.3
62
291
478
2,339
12.5
20.4
47166
944
3.56
4.58
5.92
8.3
71
327
542
2,453
13.3
22.1
47167
1,011
3.86
4.75
5.85
4.8
72
343
560
2,717
12.6
20.6
47169
1,105
3.50
4.50
6.09
9.4
69
308
514
2,526
12.2
20.3
47178
648
4.12
4.90
6.70
1.4
70
342
552
2,566
13.3
21.5
47179
440
3.91
5.00
6.60
2.5
68
338
541
2,625
12.9
20.6
47198
993
3.93
5.11
7.30
10.0
70
360
572
2,856
12.6
20.0
47199
118
5.06
6.90
8.78
n/a
72
500
718
3,979
12.6
18.0
47226
833
4.14
4.96
5.87
6.3
66
329
527
2,417
13.6
21.8
47228
356
4.04
5.20
7.08
2.6
67
349
551
3,295
10.6
16.7
47229
583
4.07
4.81
6.17
5.1
64
310
503
2,767
11.2
18.2
47239
404
4.69
5.50
7.50
[2.2]
70
382
591
3,545
10.8
16.7
47249
487
3.66
5.26
7.40
6.6
67
354
556
2,973
11.9
18.7
47259
482
3.83
5.11
7.70
3.0
66
339
538
2,968
11.4
18.1
47269
324
4.68
5.85
8.09
2.8
72
420
636
3,827
11.0
16.6
47279
463
4.17
5.09
6.31
2.6
60
304
483
2,669
11.4
18.1
Ø 17,365
3.95
5.00
6.93
5.5
67 335 537 2,730 12.3
19.7
469,3183)
4.12
5.73
9.90
3.6
72 412 628 3,494 11.8
18.0
3)
Ø NRW
1) [number of cases of limited significance] 2) includes €3.00 operating cost/m2 (DMB operating cost index 2010) 3) total of offers Source: CBRE; based on data from: IDN Immodaten, Michael Bauer Research (purchasing power data), empirica (vacancy)
Postcode allocation 47051 Altstadt, 47053 Dellviertel, Hochfeld, 47055 Wanheimerort, 47057 Neudorf, 47058 Duissern, 47059 Kaßlerfeld, Neuenkamp, 47119 Ruhrort, Laar, 47137 Mittel-, Untermeiderich, 47138 Obermeiderich, 47139 Beeck, Beeckerwerth, 47166 Alt-Hamborn, 47167 Neumühl, 47169 Marxloh, 47178 Overbruch, Vierlinden, 47179 Aldenrade, Wehofen, 47198 Alt-Homberg, Hochheide, 47199 Baerl, 47226 Hochemmerich, 47228 Bergheim, 47229 Friemersheim, 47239 Rumeln-Kaldenhausen, 47249 Angerhausen, Buchholz, Wanheim, 47259 Huckingen, Hüttenheim, Ungelsheim, Mündelheim, 47269 Großenbaum, Rahm, 47279 Wedau, Bissingheim
94 | LEG Housing Market Report NRW 2012
Total rent in % of household purchasing power 21.8 – 36.0 20.2 – 21.7 19.0 – 20.1 18.2 – 18.9 17.6 – 18.1 16.9 – 17.5 16.0 – 16.8 11.1 – 15.9
LEG Housing Market Report NRW 2012 | 95
DIRECTORY OF SOURCES Federal Labor Office Capital 6/2012 DekaBank City Rating, 2011 Property Market Report from the City of Hagen, 2011 Committee of Valuation Experts of the City of Münster IW Consult GmbH, Cologne Phoenix Lake Development Corporation, 2012 City of Dortmund Statistical Office of North Rhine-Westphalia Economic Development Office, District of Minden-Lübbecke www.derwesten.de www.duesseldorf.de www.it.nrw.de/statistik/g/daten/eckdaten/r523baugenehm.html www.muenster.de
268 | LEG Housing Market Report NRW 2012
GLOSSARY Scoring: Ranking of the 54 districts and cities of North Rhine-Westphalia and the 11 other most populous cities in Germany in terms of the attractiveness of their property market. Population forecast: Forecast of the population as prepared by the Statistical Office of North Rhine-Westphalia. The model applied is based on assumptions with regard to the development of the birth rate, life expectancy and the net migration rate. Household forecast: Forecast of the number of households as prepared by the German Federal Statistical Office. The model applied is based on the figures from the micro census on the development of private households in the period from 1991 to 2010. The results of the 12th coordinated population projection are taken into account. Household purchasing power: The income available to private households from employment and self-employment including transfer benefits (unemployment benefits, child allowance, family allowance, annuities, pensions, training assistance, capital gains, income from agriculture and forestry, income from letting and leasing, etc.). Source: Michael Bauer Research GmbH Purchasing power index: Per-capita purchasing power of the district or city compared with the national average (Germany = 100). Source: Michael Bauer Research GmbH
Multiple: Purchase price (excluding incidental costs) / gross rental income (before deduction of non-recoverable management costs). Median: The numerical value separating the higher half of a sample from the lower half such that 50 percent of the values in the sample are contained in the upper and lower halves respectively. Lower market segment: The segment containing the cheapest 10 percent of the available properties in the entire sample. Upper market segment: The segment containing the most expensive 10 percent of the available properties in the entire sample. Entire market segment: All of the available properties recorded via IDN Immodaten in the respective period, adjusted for duplicates. Price range in the middle market segment: The range of asking rents covered by 80 percent of the available properties recorded. Housing cost burden: Proportion of the monthly purchasing power of a household accounted for by rent excluding and including heating. Formula: Housing costs (excluding/including heating) x 100 / monthly household purchasing power.
Vacancy rate: The ratio of the active housing stock in apartment complexes for which no rent is being paid to the total active housing stock. empirica calculates vacancy rates based on the settlement of utility costs by Techem. Residential construction approvals: Approved construction measures for apartments in residential and non-residential buildings, including existing measures. Source: Statistical Office of North RhineWestphalia Residential construction completions: Completed apartments in residential and non-residential buildings, including existing measures. Source: Statistical Office of North Rhine-Westphalia Housing stock: Total number of apartments in residential and non-residential buildings. IDN Immodaten: Germany-wide database of properties available for rental and purchase, with around 2 million ads from more than 100 sources added every quarter. Housing costs (excluding heating): Average apartment size x rent excluding heating per square meter (median). Housing costs (including heating): Average apartment size x (rent excluding heating per square meter (median) + utility costs of €3.00).
LEG Housing Market Report NRW 2012 | 269
MASTHEAD Publisher: LEG Management GmbH Hans-Böckler-Straße 38 40476 Dusseldorf Tel. +49 211 4568-329 Fax +49 211 4568-500 [email protected] www.leg-nrw.de (also for partial downloads of the LEG Housing Market Report NRW) Editorial: Jens Schönhorst (responsible under German press law), Miriam Beul-Ramacher Market data: Dr. Henrik Baumunk, Kristina Kröger, Michael Schlatterer MRICS (Residential Valuation, CBRE) Graphics/Layout: Storkan Informationsdesign Cover design: Gornig Design Housing cost maps: Baumgardt Consultants, Gesellschaft für Marketing und Kommunikation bR Photos: Cover: Max Hampel, Dusseldorf (Montage: Gornig Design); p. 1: Ansgar M. van Treeck, Dusseldorf Concept and project management: Katja Binnyus, Heiko Imiela, Thomas Rücker (RUECKERCONSULT GmbH)
DISCLAIMER 2012 LEG/CBRE Information herein has been obtained from sources which are accessible to the public, (or, in certain cases, in exchange for a fee) and believed reliable. While we do not doubt its accuracy, we have not verified each piece of information and cannot make any guarantees about it, barring willful intent and gross negligence. It is your responsibility to independently confirm its accuracy and completeness. The information contained in this market report may not be used, reproduced or published without prior written permission of LEG and CBRE.
270 | LEG Housing Market Report NRW 2012
LEG Housing Market Report NRW 2012 | 1
Dear reader, Anyone who has ever watched a small child growing up will know that three years can seem like half an eternity and bring along a whole host of changes. Three years have also passed since our first LEG Housing Market Report NRW. The housing markets in Germany’s most populous state have changed significantly in the meantime. This is the conclusion reached in the third edition of our report that we now present to you. On more than 280 pages, we have compiled and analyzed all relevant information for you regarding the 12 large and 42 small housing market regions in North Rhine-Westphalia.
LEG’s managers, from left: Holger Hentschel (HOO), Thomas Hegel (CEO) and Eckhard Schultz (CFO).
As in the two previous studies, we provide you with extensive information on the economic and demographic trends, changes in rents, housing costs and purchase prices, and the development in the number of residential units completed and construction permits issued. And for the first time, we have also integrated a separate section on new construction activity in North Rhine-Westphalia’s top 12 cities. The current data pool, which now covers three years, also allows us to draw initial conclusions regarding price developments in the 864 postcode areas. There were only a small number of rural regions left where this was not possible on account of a lack of data due to the low number of rental apartments on offer. No other property-related publication examines the development of the 54 housing market regions in North Rhine-Westphalia in such detail. The first two editions met with great interest and professional recognition from cities, a ssociations, market observers, analysts, fund managers, and not least, from specialist media and daily newspapers. For instance, more and more property valuation boards and municipal housing companies are referring to the first two editions, market researchers are using it in their day-to-day work, and the figures and analyses it contains are frequently quoted in printed media and radio reports. The analysis of the media response performed at the end of 2011 showed that 110 articles and reports had appeared, reaching an audience of around 57 million readers and listeners. The strong positive response gave us additional encouragement to continue with the report. The LEG Housing Market Report NRW 2012 once again demonstrates our knowledge of the housing market in North Rhine-Westphalia. We would like to take this opportunity to express our particular gratitude to our research partner CBRE, which compiled all of the data in its usual meticulous manner and evaluated it in conjunction with our regional and branch managers. We hope that the report makes for enjoyable reading and will support you in your day-to-day work. For German-speaking analysts and fund managers, the third edition is also available in German. Sincerely,
Thomas Hegel Management Spokesman, CEO
Eckhard Schultz Managing Director, CFO
Holger Hentschel Member of Management, HOO
LEG Housing Market Report NRW 2012 | 1
Duisburg
Score
15
of max.
48
Apartment buildings enjoy increased demand among investors
T
rends in the Duisburg residential property market in the past year were disparate. While asking rents for apartments were unchanged as against the previous year, the advertised purchase prices for owner-occupied properties were lower in some cases. By contrast, sellers of apartment buildings in Duisburg demanded significantly
higher prices than in 2011, with the difficult demographic situation in the city as a whole apparently having no impact on this market segment. Detached houses, owner-occupied apartments and land earmarked for development with a value of €624 million changed hands in Duisburg in 2011 – an increase of 3.5 percent on the prior-year figure.
Macroeconomic data Duisburg
NRW Germany
Year
Residents 489,559 17,845,154 81,751,600
2010
Population density (residents/km²) 2,103
523
229
2010
Population development in % –4.9
–0.9
–0.6
2000–2010
Population forecast in % –5.9
–2.2
–3.4
2010–2025
Households 240,512 8,562,837 39,708,452
2010
Household development in % –2.9
3.0
3.9
2000–2010
Household forecast in % –4.1
1.3
0.9
2010–2020
Purchasing power 85.4
101.1
100.0
2011
Per capita purchasing power in € 17,221
20,368
20,154
2011
Workers paying social insurance contribution 155,094
5,820,035
27,710,487
2010
Development of social insurance contributions –2.1
–1.5
–0.4
2000–2010
Source: NRW Statistics Office, Federal Statistics Office/CBRE (household forecast), Michael Bauer Research (purchasing power), compiled by CBRE
Gross domestic product per employed person in €
Unemployment rate in % of all employable civilians
80,000
18.0
70,000
60,513
17.0
13.1
16.0
60,000 50,000
15.0
40,000
14.0
30,000
13.0
20,000
12.0
10,000
11.0 10.0
0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: NRW Statistics Office, compiled by CBRE
90 | LEG Housing Market Report NRW 2012
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Source: Federal Labor Office, compiled by CBRE
Rent according to postcode for units in apartment buildings in €/m2/month 5.71 – 6.90 5.27 – 5.70 5.12 – 5.26 5.05 – 5.11 4.92 – 5.04 4.89 – 4.91 4.71 – 4.88 4.50 – 4.70
Economic structure The new local planning director in Duisburg, Carsten Tum, is promising “continuity” with respect to all of the projects that have been initiated. Two new furniture stores are planned in Duisburg, and the construction of a factory outlet center (FOC) in the north of the Ruhr city has already been resolved, although this could be put at risk by the election of a new mayor this summer. The aim is to retain the existing purchasing power while attracting new money. A new office area is also set for construction immediately next to the main railway station, with the newly installed planner-in-chief de-
scribing the plans as positive. When taking of Europe’s largest inland port. The duisport office this April, he also expressed his satis- Group, the local logistics giant, again refaction at the development of Duisburg city corded growth in revenue and goods turncenter. Following the opening of the “Forum over in 2011. Although the service sector is Duisburg” shopping center and the “Königs- on the rise and many former industrial argalerie,” the latest construction project is eas, such as the Landscape Park Duisburg the “Stadtfenster,” which will play host to North, have now been turned into green the Duisburg central library, the adult ed- spaces, Duisburg remains an industrial city. ucation center and various shops. How- Other key sectors for the local economy inever, the economy of the steel city benefits clude iron and steel, mechanical engineering from more than just retail: The logistics sec- and chemicals. Duisburg is also in demand tor has long played an important role, too. as an academic center: With around 37,000 The Ruhrort part of the city, at the conflu- students, the University of Duisburg-Essen ence of the Rhine and Ruhr, is the location is one of Germany’s 10 largest universities. LEG Housing Market Report NRW 2012 | 91
Duisburg
Rising prices for apartment buildings – but stagnating rents
F
ollowing the re-election of the mayor and the state elections in North Rhine-Westphalia, new players are controlling the fate of Duisburg. The population of just under 490,000 will undoubtedly be interested to see how things proceed with the large number of controversial new construction projects and the inland port. Two construction scandals, restaurant closures and the relocation of the tourist magnet Legoland to Oberhausen have delivered a blow to the attractive neighborhood on the waterfront, although it continues to enjoy great popularity as a nightlife destination for residents of Duisburg and beyond. While the local logistics industry is booming and warehousemen now are even said to be able to choose their employer, the unemployment rate remains high at 13.1 percent. Like many German cities, Duisburg has extensive debts. The city needs to save €75 million by 2021. As no area will be left unaffected by the cuts, the city even launched a portal where, for two weeks, residents were able to vote on the city authorities’ money-saving proposals. Despite the patchy economic and financial performance of the city in 2011, the property market proved to be extremely solid. According to the local Property Valuation Board, detached houses, owner-occupied apartments and land earmarked for development with a value of €624 million
Housing stock data
changed hands in Duisburg – up 3.5 per- ing by 25.2 percent. However, the absocent on the figure recorded in 2010. The lute figures show that the two markets number of purchase agreements rose from are worlds apart. In Dusseldorf, buyers 3,179 in 2010 to 3,426 in 2011, an increase are required to pay an average of €704 of 7.8 percent. A spokesman for the Prop- per square meter for an apartment in the erty Valuation Board described this devel- lower market segment – more than twice opment as “more than stable,” citing the as much as in Duisburg. Nevertheless, growth in sales and the reduction in the the upturn in house prices reflects the number of foreclosure auctions. clear growth in buyer confidence in the local property market and its prospects This year’s analysis by LEG and CBRE con- for future development. Furthermore, it firms the positive underlying trend for was not only simple buildings in comparthe Duisburg residential property mar- atively poor locations that enjoyed price ket. Nevertheless, the figures do provide growth in 2011: Sellers of apartment some surprises. For example, the sales buildings in the upper market segment market for apartment buildings enjoyed were also able to demand higher average an impressive upturn in 2011, with ask- purchase prices than in the previous year. ing prices across all location and qual- Asking prices in this segment increased by ity classes increasing by 3.9 percent. This an impressive 15.9 percent to €1,395 per means that apartment buildings between square meter. This development is unRahm in the south of the city and Walsum doubtedly also a source of satisfaction for in the north are now advertised for an av- the city and its property owners. Comerage of €597 per square meter. In addi- pared with the other major cities in North tion, there were unusually pronounced Rhine-Westphalia, buyers at the conprice movements in the upper and lower fluence of the Rhine and Ruhr pay relamarket segments. Asking prices for build- tively little for properties in this category. ings in simple locations and with lower- Only Gelsenkirchen can boast extremely quality specifications increased signifi- good apartment buildings that are more cantly by 16.6 percent over the course of affordable, with the average price per the year. Properties in this category now square meter coming in at €1,158. Howcommand €301 per square meter. Only ever, the current price growth could indiDusseldorf saw stronger price growth in cate that Duisburg’s residential property the same period, with asking prices for market was previously undervalued in simple apartment buildings in the state some areas and that it is now catching up capital of North Rhine-Westphalia ris- to other locations.
2004 2005 2006 2007 2008 2009 2010
Vacancy rate in %
6.4 6.2 5.2 4.4 4.4 5.5 n/a
Permits for new buildings
801
Finished apartments
866
Housing stock
257,340
Housing stock in apartment buildings
77.6 77.5 77.4 77.4 77.3 77.2 77.2
Source: empirica (vacancy), NRW Statistics Office, compiled by CBRE
92 | LEG Housing Market Report NRW 2012
690 668 257,866
747
505
591
884
258,152
258,948
377 502 259,178
597 365 259,289
652 340 259,457
Gap between simple and high-end properties expands
Prime apartments offered for more than €8 per square meter
Development on the Duisburg market for owner-occupied apartments was disparate in 2011. As in the rest of the major cities in North Rhine-Westphalia, the pronounced focus on security when making investment decisions meant that prices for apartments in the upper market segment increased. Sellers in Duisburg demanded €2,035 per square meter for such properties, 2.3 percent more than in 2010. This meant that the upward trend recorded in the previous year continued, with owner-occupied apartments in the upper segment enjoying popularity among buyers, leading to price growth of 1.5 percent. By contrast, interested parties in the lower market segment were somewhat more skeptical. Accordingly, asking prices for corresponding apartments in Duisburg declined by 5.1 percent in 2011, coming in at €324 per square meter. This not only sounds low, but also places Duisburg at the lower end of the scale when compared with the other major cities in North Rhine-Westphalia. The only location to offer even more affordable apartments in this market segment is Gelsenkirchen (€254 per square meter). This means that the gap between properties in the lower and upper market segments in Duisburg has become even larger. The areas with stable or rising apartment prices are primarily located in the south and east of the city.
There was little in the way of change for landlords in 2011, with rents across all location and quality classes remaining stable at €5 per square meter. However, asking prices for apartments in the lower market segment increased slightly by 0.5 percent. With starting rents of just €3.95 per square meter per month, however, Duisburg remains the second-cheapest city in all of North Rhine-Westphalia for pricesensitive tenant groups. Only Gelsenkirchen has a lower rental level, with simple apartments available from as little as €3.81 per square meter per month. The downturn in prices in the upper market segment in the previous year (‑5.5 percent) was less pronounced in 2011, with asking rents for high-quality properties falling by “only” 2.3 percent to below the €7 mark (€6.93 per square meter). Nevertheless, the high-end and simple market segments in Duisburg are worlds apart. At a postcode level, there is a huge discrepancy in rental prices: while simple apartments are available for well under €4 in the areas of Marxloh (postcode area 47169, €3.50 per square meter per month) and Obermeiderich (postcode area 47138, €3.44 per square meter per month), landlords in the prosperous area of Baerl (postcode area 47199) can demand up to €8.78 per square meter for luxury apartments – a figure
that is not far behind the Rhein-Sieg-Kreis (€8.95), which occupies fifth place in the scoring for the upper market segment. All in all, the city with the largest inland port in Europe remains one of the most affordable residential locations in North RhineWestphalia. This is underlined by an analysis of the trend for the past three years, as well as the current breakdown at postcode level. Only 10 of the 25 postcode areas have asking rents of more than €7 per square meter for apartments in the upper market segment, while only three sub-markets break the €8 barrier. In addition to the aforementioned high-end market of Baerl (postcode area 47199), these are Altstadt (postcode area 47051), which also includes the modern, fashionable and comparatively expensive Innenhafen neighborhood, and Großenbaum, Rahm (postcode area 47269). At the same time, simple properties can still be found for less than €4 per square meter in 11 of the city’s postcode areas. Although prices are moderate on the whole, the relatively low purchasing power in Duisburg means that residents have to dig deep to afford their rent. None of the individual sub-markets can boast monthly household purchasing power in excess of €4,000. On average, households are required to spend 19.7 percent of their average monthly purchasing power of €2,730 on rent. This compares with the figure of 18 percent for North Rhine-Westphalia as a whole.
LEG Housing Market Report NRW 2012 | 93
Duisburg
Housing cost
Housing data Postcode
Number of rental offers
Basic rent in Median bottom market basic rent in segment in €/m2/month €/m2/month
Basic rent in top market segment in €/m2/month
47051
719
4.29
5.71
47053
1,048
3.92
47055
726
4.16
47057
1,114
4.62
5.69
47058
697
4.50
5.70
7.50
47059
381
4.02
5.04
6.40
Vacancy 2009 in %1)
Apartment size Ø in m2
8.75
4.4
69
4.91
6.21
8.6
5.06
6.25
5.9
7.41
3.4
Basic housing cost Ø in €/month
Total Household Basic rent in Total rent in housing purchasing- % of house- % of housecost 2) Ø in power Ø in hold purcha- hold purcha€/month €/month sing power sing power
13.9
21.2
2,254
14.0
22.5
2,548
12.5
19.9
14.4
22.0
396
603
2,850
64
315
508
63
319
508
63
360
549
2,494
3.9
67
381
582
2,985
12.8
19.5
6.6
64
320
510
2,555
12.5
20.0
47119
760
3.97
4.88
6.45
6.1
69
336
543
2,371
14.2
22.9
47137
1,397
4.00
4.91
6.24
5.5
67
329
530
2,368
13.9
22.4
47138
690
3.44
4.65
5.61
6.4
65
305
501
2,730
11.2
18.4
47139
642
3.85
4.70
5.76
6.3
62
291
478
2,339
12.5
20.4
47166
944
3.56
4.58
5.92
8.3
71
327
542
2,453
13.3
22.1
47167
1,011
3.86
4.75
5.85
4.8
72
343
560
2,717
12.6
20.6
47169
1,105
3.50
4.50
6.09
9.4
69
308
514
2,526
12.2
20.3
47178
648
4.12
4.90
6.70
1.4
70
342
552
2,566
13.3
21.5
47179
440
3.91
5.00
6.60
2.5
68
338
541
2,625
12.9
20.6
47198
993
3.93
5.11
7.30
10.0
70
360
572
2,856
12.6
20.0
47199
118
5.06
6.90
8.78
n/a
72
500
718
3,979
12.6
18.0
47226
833
4.14
4.96
5.87
6.3
66
329
527
2,417
13.6
21.8
47228
356
4.04
5.20
7.08
2.6
67
349
551
3,295
10.6
16.7
47229
583
4.07
4.81
6.17
5.1
64
310
503
2,767
11.2
18.2
47239
404
4.69
5.50
7.50
[2.2]
70
382
591
3,545
10.8
16.7
47249
487
3.66
5.26
7.40
6.6
67
354
556
2,973
11.9
18.7
47259
482
3.83
5.11
7.70
3.0
66
339
538
2,968
11.4
18.1
47269
324
4.68
5.85
8.09
2.8
72
420
636
3,827
11.0
16.6
47279
463
4.17
5.09
6.31
2.6
60
304
483
2,669
11.4
18.1
Ø 17,365
3.95
5.00
6.93
5.5
67 335 537 2,730 12.3
19.7
469,3183)
4.12
5.73
9.90
3.6
72 412 628 3,494 11.8
18.0
3)
Ø NRW
1) [number of cases of limited significance] 2) includes €3.00 operating cost/m2 (DMB operating cost index 2010) 3) total of offers Source: CBRE; based on data from: IDN Immodaten, Michael Bauer Research (purchasing power data), empirica (vacancy)
Postcode allocation 47051 Altstadt, 47053 Dellviertel, Hochfeld, 47055 Wanheimerort, 47057 Neudorf, 47058 Duissern, 47059 Kaßlerfeld, Neuenkamp, 47119 Ruhrort, Laar, 47137 Mittel-, Untermeiderich, 47138 Obermeiderich, 47139 Beeck, Beeckerwerth, 47166 Alt-Hamborn, 47167 Neumühl, 47169 Marxloh, 47178 Overbruch, Vierlinden, 47179 Aldenrade, Wehofen, 47198 Alt-Homberg, Hochheide, 47199 Baerl, 47226 Hochemmerich, 47228 Bergheim, 47229 Friemersheim, 47239 Rumeln-Kaldenhausen, 47249 Angerhausen, Buchholz, Wanheim, 47259 Huckingen, Hüttenheim, Ungelsheim, Mündelheim, 47269 Großenbaum, Rahm, 47279 Wedau, Bissingheim
94 | LEG Housing Market Report NRW 2012
Total rent in % of household purchasing power 21.8 – 36.0 20.2 – 21.7 19.0 – 20.1 18.2 – 18.9 17.6 – 18.1 16.9 – 17.5 16.0 – 16.8 11.1 – 15.9
LEG Housing Market Report NRW 2012 | 95
DIRECTORY OF SOURCES Federal Labor Office Capital 6/2012 DekaBank City Rating, 2011 Property Market Report from the City of Hagen, 2011 Committee of Valuation Experts of the City of Münster IW Consult GmbH, Cologne Phoenix Lake Development Corporation, 2012 City of Dortmund Statistical Office of North Rhine-Westphalia Economic Development Office, District of Minden-Lübbecke www.derwesten.de www.duesseldorf.de www.it.nrw.de/statistik/g/daten/eckdaten/r523baugenehm.html www.muenster.de
268 | LEG Housing Market Report NRW 2012
GLOSSARY Scoring: Ranking of the 54 districts and cities of North Rhine-Westphalia and the 11 other most populous cities in Germany in terms of the attractiveness of their property market. Population forecast: Forecast of the population as prepared by the Statistical Office of North Rhine-Westphalia. The model applied is based on assumptions with regard to the development of the birth rate, life expectancy and the net migration rate. Household forecast: Forecast of the number of households as prepared by the German Federal Statistical Office. The model applied is based on the figures from the micro census on the development of private households in the period from 1991 to 2010. The results of the 12th coordinated population projection are taken into account. Household purchasing power: The income available to private households from employment and self-employment including transfer benefits (unemployment benefits, child allowance, family allowance, annuities, pensions, training assistance, capital gains, income from agriculture and forestry, income from letting and leasing, etc.). Source: Michael Bauer Research GmbH Purchasing power index: Per-capita purchasing power of the district or city compared with the national average (Germany = 100). Source: Michael Bauer Research GmbH
Multiple: Purchase price (excluding incidental costs) / gross rental income (before deduction of non-recoverable management costs). Median: The numerical value separating the higher half of a sample from the lower half such that 50 percent of the values in the sample are contained in the upper and lower halves respectively. Lower market segment: The segment containing the cheapest 10 percent of the available properties in the entire sample. Upper market segment: The segment containing the most expensive 10 percent of the available properties in the entire sample. Entire market segment: All of the available properties recorded via IDN Immodaten in the respective period, adjusted for duplicates. Price range in the middle market segment: The range of asking rents covered by 80 percent of the available properties recorded. Housing cost burden: Proportion of the monthly purchasing power of a household accounted for by rent excluding and including heating. Formula: Housing costs (excluding/including heating) x 100 / monthly household purchasing power.
Vacancy rate: The ratio of the active housing stock in apartment complexes for which no rent is being paid to the total active housing stock. empirica calculates vacancy rates based on the settlement of utility costs by Techem. Residential construction approvals: Approved construction measures for apartments in residential and non-residential buildings, including existing measures. Source: Statistical Office of North RhineWestphalia Residential construction completions: Completed apartments in residential and non-residential buildings, including existing measures. Source: Statistical Office of North Rhine-Westphalia Housing stock: Total number of apartments in residential and non-residential buildings. IDN Immodaten: Germany-wide database of properties available for rental and purchase, with around 2 million ads from more than 100 sources added every quarter. Housing costs (excluding heating): Average apartment size x rent excluding heating per square meter (median). Housing costs (including heating): Average apartment size x (rent excluding heating per square meter (median) + utility costs of €3.00).
LEG Housing Market Report NRW 2012 | 269
MASTHEAD Publisher: LEG Management GmbH Hans-Böckler-Straße 38 40476 Dusseldorf Tel. +49 211 4568-329 Fax +49 211 4568-500 [email protected] www.leg-nrw.de (also for partial downloads of the LEG Housing Market Report NRW) Editorial: Jens Schönhorst (responsible under German press law), Miriam Beul-Ramacher Market data: Dr. Henrik Baumunk, Kristina Kröger, Michael Schlatterer MRICS (Residential Valuation, CBRE) Graphics/Layout: Storkan Informationsdesign Cover design: Gornig Design Housing cost maps: Baumgardt Consultants, Gesellschaft für Marketing und Kommunikation bR Photos: Cover: Max Hampel, Dusseldorf (Montage: Gornig Design); p. 1: Ansgar M. van Treeck, Dusseldorf Concept and project management: Katja Binnyus, Heiko Imiela, Thomas Rücker (RUECKERCONSULT GmbH)
DISCLAIMER 2012 LEG/CBRE Information herein has been obtained from sources which are accessible to the public, (or, in certain cases, in exchange for a fee) and believed reliable. While we do not doubt its accuracy, we have not verified each piece of information and cannot make any guarantees about it, barring willful intent and gross negligence. It is your responsibility to independently confirm its accuracy and completeness. The information contained in this market report may not be used, reproduced or published without prior written permission of LEG and CBRE.
270 | LEG Housing Market Report NRW 2012
