How are property and rental prices in the Hanseatic city developing? Do apartments and houses represent a worthwhile investment in the long term? If you are interested in buying a property in Hamburg, we have compiled some interesting information about investing in residential property.
Investment in Hamburg real estate
2 | The construction industry is booming
3 | Growing demand, rising rents
4 | Popular districts: This is where the people of Hamburg like to live
With one of the largest transshipment ports in the world and its international airport, Hamburg is one of the most critical logistics locations in Europe. The Hanseatic city also offers excellent prospects on the job market as a centre of education, research, and media. Not surprisingly, the city-state attracts more and more people. Current forecasts expect the number of inhabitants to rise to around 2 million by 2040.
High-quality new construction projects are to meet the demand on the housing market. In the "Contract for Hamburg", the Senate agreed with the districts in 2017 to issue 10,000 building permits annually. With a total of 10,377 building permits issued for apartments, this target was again achieved in 2022. Hamburg thus offers attractive options for capital investors.
Building new apartments is also necessary in the Hanseatic city due to the continuing high influx. Rental apartments are in high demand here, which is reflected in ever higher rents. Currently, the average new-build rent in Hamburg is 18.34 €/m² and 13.89 €/m² in the existing stock. Even though flats in ornate old buildings – such as those found in Altona – are very popular in Hamburg, the current rent index nevertheless shows: the highest rents can be achieved with new-build apartments.
Eimsbüttel, Winterhude and HafenCity: according to the Hamburger Morgenpost, these are the favourites among the 104 districts of the Hanseatic city. In a survey, about seven percent of the participants said that they would like to live in Eimsbüttel. Winterhude received six percent of the votes, HafenCity followed with five percent.
These districts are also among the top 10: Barmbek-Nord, Eppendorf, Ottensen, Blankenese, Barmbek-Süd, Altona-Altstadt and St. Pauli.
Living space is becoming increasingly scarce, and rents are rising. As a result, more and more Hamburg residents are considering an option: work in Hamburg, live in Schleswig-Holstein. The green surroundings of the Hanseatic city offer several advantages – especially in communities with excellent transport connections, such as Norderstedt.
Located directly on Hamburg's northern city limits, Norderstedt seamlessly connects to the Hanseatic city. Without noticing it, you can cross the state border with the U1 underground from Langenhorn. With its well-developed infrastructure and the short distances to the countryside, Norderstedt is especially interesting for families.
The increasing attractiveness of Norderstedt also leads to an increase in rents here, north of Hamburg, with current rents between 12 and 13 €/m².
As in many other large cities, Hamburg is subject to the Tenancy Law Amendment Act, or the so-called “rental brake”. It states that rents for new leases in sought-after areas may only be a maximum of ten percent above the local comparative rent.
Exceptions to this rule include new buildings used and rented for the first time after 2014. So buying a new property gives you more freedom of choice.
In Hamburg, the signs are pointing to growth. The Hanseatic city keeps drawing more and more people, which is why current forecasts are predicting a further shortage of living space. In the long term, therefore, the metropolis offers good rentability and stable returns. The purchase of an apartment or house in Hamburg as an investment property is, therefore, an attractive investment.
Quality of life
Hamburg is among the greenest cities in Germany, and is regularly ranked in Mercer’s “Quality of Living” top 20. The city was recently ranked 19th.
1st place: Vienna 10th place: Sydney 19th place: Hamburg 45th place: New York 57th place: Rome 74th place: Dubai 103rd place: Shanghai 167th place: Moskow 231st place: Baghdad
Supply and demand
Sources: IW Köln, Statistikamt Nord, Regionaldatenbank, PROJECT Research