How is the real estate market in Schleswig-Holstein developing?

"In the past year, we have now seen a clear development from a seller's market to a buyer's market," says Christian von Gottberg, Managing Director of Engel & Völkers Schleswig-Holstein. "Real estate loans now cost significantly more, so the situation from a buyer's perspective is changing considerably."

This has an impact on the number of potential buyers when selling a property and in some cases, price reductions in favor of prospective buyers are also being observed. Even if high interest rates are certainly no reason to be happy, the market changes have a strategic advantage for buyers: where there were often several interested parties per property in the past, this number is now lower.

"We have also seen an increase in the number of residential properties on offer in Schleswig-Holstein over the past few months. We see this as an opportunity to meet the demand of our search customers much better than has been possible in previous years," says von Gottberg. This means that buyers are increasingly able to choose between properties without having to make compromises - e.g. in terms of location.

Sellers need to show staying power

So what does this mean for anyone considering selling their property in the near future? Even if the market is turning to the advantage of buyers, there is currently no reason for sellers to worry: "Basically, we are seeing stable prices and can speak of stagnation at a high level. In many cases, especially for attractive properties in the premium segment, prices are continuing to develop positively," is Christian von Gottberg's assessment.

When selling your own property, a little more patience may be required and, due to the current situation, it may take longer to sell. Especially now, sellers are better off with a professional real estate agent at their side. "Engel & Völkers has the great advantage that we know exactly what is happening on the market thanks to our size and the many data points available," Sven Odia, CEO of Engel & Völkers AG, told Handelsblatt. "But at the end of the day, you always have to understand one thing: The price is a coincidence between supply and demand. It is not us as estate agents who set the price, but we mediate between buyer and seller," Odia continues.

Even if it has become more demanding to market a property, the current market situation is not as challenging for Engel & Völkers as it is for smaller competitors. Thanks to an extensive network of search clients, Engel & Völkers is in a position to find a suitable buyer more quickly and on better terms.

Stable prices per square meter in Schleswig-Holstein, which remains popular

In the third year of the coronavirus pandemic, single-family homes in the outskirts of larger cities and in more rural areas are still very popular. In some cases, prices here have risen even more than in the major cities themselves in recent years. This trend was also evident in Schleswig-Holstein in 2022, although prices have stagnated since the end of the second quarter.

Location and infrastructure are key factors for prospective buyers looking for a primary residence; the regions around the larger northern German cities such as Lübeck, Flensburg, Kiel and Neumünster are particularly attractive. Cities such as Bad Segeberg and Bad Oldesloe are also in demand thanks to their proximity and good connections to Hamburg. Existing properties in particular continue to gain in attractiveness here, not least due to the resource-related delays in new construction projects.

The average price per square meter for a house purchase in Schleswig-Holstein was € 3,423 in the fourth quarter of 2022, an increase of 2.9% compared to the fourth quarter of the previous year.* While the area around Hamburg and the North Sea island of Sylt have the highest prices, houses in Schleswig-Holstein's largest cities such as Kiel (€ 3,992/m²), Lübeck (€ 3,701/m²), Flensburg (€ 3,241/m²) and Neumünster (€ 3,054/m²) are significantly cheaper in comparison. Low prices per square meter can also be found in the district of Dithmarschen: Here, home buyers paid an average of €2,483 per square meter in 2022. The district of Steinburg, with towns such as Itzehoe, Glückstadt and Kellinghusen, also attracts buyers with relatively low prices per square meter of €2,691, in addition to its good location in the Hamburg metropolitan region - between the North Sea and the Hanseatic city. By comparison, the average price per square meter for houses in 2022 was €5,745 in Hamburg, €5,061 in Berlin and €10,040 in Munich.

Real estate is and will remain a stable investment

It is difficult to make an exact forecast on the development of the German real estate market. But he is certain of one thing: "There are several factors that guarantee that real estate will remain a stable investment in the future. Houses are an anchor of stability, especially in times of high inflation - if you choose the right ones. Properties in prime locations will always be in demand. However, we are also noticing a trend towards sustainable and energy-efficient living."

"The fact that interest in real estate remains high compared to last year, despite rising interest rates and inflation, was clearly noticeable at Engel & Völkers Schleswig-Holstein last year," says Christian von Gottberg.