The real estate market in Düsseldorf is experiencing an unprecedented decline

The real estate market in Düsseldorf recorded significant restraint in 2023, which was described by experts as a kind of 'shock paralysis', according to Thomas Weindel, chairman of the expert committee. An analysis based on all completed purchase contracts from the previous year was presented on Wednesday, and the results show historically low figures.

Significantly fewer properties were sold than in previous years, with turnover falling massively. In total, only around 3,000 purchase contracts were concluded, with turnover just under the two billion euro mark. A few years ago, around 6000 transactions with a turnover of more than six billion euros were recorded. The decline in office and commercial properties in particular is reinforcing the negative trend. The expert committee recorded a drop in turnover of around 90 percent compared to the previous year. There was a complete absence of large transactions over 100 million euros, with only ten (previous year: 47) transactions over ten million euros registered.

The percentage declines in residential real estate are in the low double-digit percentage range. One particularly alarming figure is the number of only 109 new-build apartments sold over the course of an entire year. It should be noted that this figure may also include properties that were not completed due to insolvencies.

Compared to the dramatic slump in overall turnover and sales figures, the price declines recorded for residential properties appear less severe, but a downward trend can still be observed throughout. Thomas Weindel comments: 'Air is escaping from the real estate bubble - but there is no question of it bursting. He sees a phase of recovery rather than a catastrophe.

The largest sector comprises post-war apartments that are more than ten years old. The standardized price per square meter was recently around 4100 euros and has thus even fallen below the 2020 level. At the beginning of 2022, the record value was still over €5,000, but fell below this threshold towards the end of the year. Overall, therefore, there has been a decline of 20% since the price peak, although this is somewhat less pronounced in terms of annual averages (minus 12% year-on-year). However, it should also be noted that the €2,500 mark was not even reached in 2015, for example, although there had already been a significant increase in previous years.

Prices for pre-war buildings fell from 6000 to 5000 euros per square meter in two years. For new builds, there was only a slight decrease of just under 7000 euros due to a small change of three percent. One reason for this price stability is the lack of willingness to reduce prices due to the great reluctance to buy.

Prices for houses have also fallen significantly. In 2022, terraced houses still cost an average of 4900 euros per square meter, while in 2023 it was just over 4300 euros. A similar trend can be seen for detached houses, which at 5600 euros per square meter actually cost slightly less than in 2021, when the price was still 16 percent higher.

The price decline is particularly significant for commercial properties, where prices have fallen by 15 percent from 2700 euros per square meter.

The peak values for prime locations such as Königsallee remain stable, with a range of 32,000 to 55,000 euros per square meter of building land. For owner-occupied homes in medium to good locations such as Benrath, standard land values of €1050 to €1800 per square meter also continue to apply.

A closer look at the city districts reveals clear differences. In medium locations such as Unterrath, the standard property values for condominiums (built in 1980) are 3850 euros per square meter, while peak values of 10,000 euros have been reached several times in Oberkassel, according to the committee.

Source: RP online

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