Real estate prices – How does the price of a property actually come about? Is it made up of several components and if so, which ones? What influences the price of real estate? Whether for a house or an apartment, we have explained the factors influencing a property price for you. There are various factors that influence the price of a property.
Factors influencing the price of real estate – How can you save money when buying real estate?
Are you simply unable to find a suitable property that meets your price expectations? Then you should consider which of the influencing factors has the least importance for you. Can you find a compromise with yourself or your family by agreeing not to live so centrally, or to do without a terrace or balcony? These compromises can bring the price of the property closer to your expectations.
The location – Where should the property be located?
One of the most important factors influencing the price of a property is its location. How far is it to the city centre, to the nearest supermarket or to important doctors? This distance plays an important role for everyone. Nevertheless, a central location of the property is not the first priority for everyone. Many property buyers prefer to live in a quiet area to escape the stress of everyday life. Nevertheless, the most important shops or doctors should not be too far away. If it doesn’t have to be a big city or central location, it makes sense to compromise here and save money in this respect.
Single-family house or terraced house – Which costs more?
What property is it? If it is a terraced house, you have directly adjacent neighbours. For this reason, the value of this property is lower than that of a detached house. In a detached house you have less noise from neighbours and you have more control over your own noise level. With a detached house you usually benefit from the advantage of having a larger green area at your disposal, whereas many people feel a little cramped in terraced houses. With a terraced house it is therefore advantageous if you know the neighbours beforehand and know that you would get along with them.
Check modernisation status – What measures have been carried out recently?
If a property appeals to you in many ways, it is still important to pay attention to the age of the property. If you don’t, you run the risk of having to deal with new costs very soon. What’s more annoying than having to worry about repairs or energy-saving measures to a newly purchased property? If damage to the property has not only been repaired immediately, but has also been combined with modernisation, this is considered to increase the value of the property. Recent measures such as improved thermal insulation or fire protection can be of enormous benefit to you.
Room layout – Every room needs meaning and purpose
The room layout in an apartment or house can also be of great importance. If a property is to be used as a shared flat, it is important that there are no through rooms. If a property is awkwardly cut, or even the room layout is not ideal, this will bring down the price of a property. Is the bedroom a suitable size for the furniture intended? Will a dining table fit in the kitchen or is there even an extra dining room? Many prospective buyers think very carefully beforehand about which room will serve which purpose. If a room should serve as a children’s room in the first years, then it is often already planned in advance what it could serve when the children have moved out.
Energy efficiency: saving energy and money
The energy efficiency should be checked carefully before buying a property. How old is the heating system? Are the roof and exterior walls adequately insulated? Are the windows double-glazed? These are the questions you should ask yourself before buying a property. But why is this the most important point that everyone should consider? If your purchased property satisfactorily fulfils these measures, you can save an enormous amount of money. If you are not able to check this information sufficiently yourself, it may be worthwhile to talk to an energy consultant. They will be able to tell you which renovation measures you should expect and how much you will have to pay in this respect.
Purchase prices for condominiums
This statistic compares the cities with the highest condo purchase prices from 2014 and 2018.
- Munich – Increase: 1,605
- Frankfurt am Main – Increase: 1,687
- Stuttgart – Increase: 1,181
- Potsdam – Increase: 1,835
- Berlin – Increase: 1,377
You can find more infographics at Statista
Terrace or balcony – superfluous luxury or compulsory?
Many people who don’t benefit from the luxury of having their own garden wish they had a balcony or terrace instead. Who wouldn’t like to have breakfast outside when the weather is nice, or simply switch off without having to go to a public place? But unfortunately, this advantage is not available with every property. For this reason, it has a value-increasing effect on the property price.
Demand influences the price
Having what everyone wants triggers a sense of achievement in many people. However, the higher the demand of a property is, the higher the property price will be in the end. Since the previously mentioned factors also influence the demand, this is closely related. If you opt for a more remote property, the demand also goes down and so does the price. If you own a slightly more remote property for which demand increases over time, you will benefit from an increase in value which can bring you a huge profit on resale. Additionally, if the property has been regularly refurbished or even modernised, you could make a big profit.
Residential rent index in Germany from 1995 to 2017
Not only do property prices depend heavily on the various influencing factors, but property rental prices also depend on these factors. These statistics show the development of rents in Germany.
- Residential rent index 2017 at 109.7 (increase 1.7)
- Residential rent index 2016 at 108 (increase 2.6)
- Housing rent index 2015 at 105.4 (increase 1.6)
- Housing rent index 2014 at 103.8 (increase 2.5)
- Housing rent index 2013 at 101.3 (increase 1.3)
You can find more statistics at Statista
Prefabricated house or solid house
If you decide not to buy a used house, but to build your own home, you will inevitably have to deal with the question of whether you want to build a prefabricated house or a solid house. A prefabricated house is usually cheaper than a solid house. But what are the advantages of which construction method? A big advantage of building a prefabricated house is that it is particularly fast and can be carried out in all weather conditions. The construction of a solid house takes longer. A solid house brings the advantage of a good indoor climate. In summer it does not get too hot and in winter it does not get too cold. The modern prefabricated houses also have good insulation.
Now that you know which influencing factors determine the price of a property, it is worthwhile to use this knowledge to start looking for a suitable property again. Think about which influencing factors have priority for you and you will find a suitable property.