Cologne property prices

With more than one million inhabitants, Cologne is one of the largest cities in Germany after Hamburg, Berlin and Munich. The Rhine metropolis is also one of the most sought-after places to live in Germany due to its importance for business, research and education: This can also be seen from the development of Cologne property prices, which, as in many places, have been rising continuously for years. 

What prices tenants, investors and sellers can expect in the city on the Rhine, how property prices vary in the individual districts and whether the steady upward trend will continue in the future is explained in our market report below:

Due to its attractiveness, the city of Cologne has been experiencing steady population growth for years. Since 2014, the population has increased by +3.9 percent to almost 1.09 million inhabitants. The steady increase in the number of metropolitan residents does not let the demand for living space falter. It is unlikely that the high demand for real estate will decline in the future: With a projected population of 1.2 million by 2040, there is currently no end in sight to the population boom. 

Due to the high demand for residential space, the vacancy rate in Cologne, as in many other major German cities, is low. Only 0.9 percent of available living space is unused in the Rhine metropolis. Engel & Völkers assumes that even the currently largest urban development project, Parkstadt Süd in the Bayenthal district, will only be able to alleviate this situation slightly. 

Looking at the development of rents in Cologne, a distinction must be made between existing properties and new buildings. Asking rents in the new construction sector rose by +3.32 per cent in 2020. Thus, tenants in the Rhine metropolis currently pay an average of 13.08 euros per square metre of living space. Seen over a period of five years, however, rents have risen. Since 2016, the rent for new buildings in Cologne has risen by an average of +7.65 percent. 

Rents for existing properties are developing positively across the board. In 2020, tenants paid an average square metre price of 11.73 euros. This means that rents in Cologne were an average of +1.56 percent higher than in the previous year. Over the past five years, rents for existing properties have risen by +11.5 percent, even more than for new buildings. 

The purchase prices for condominiums are also rising in the Rhine metropolis - both for existing properties and in the new building sector. The average asking price for a condominium in Cologne is currently 4.301 euros per square metre. However, this figure depends strongly on whether the property is an existing property or a new building. 

In the case of existing properties, investors paid an average square metre price of 4.181 euros last year. Prices thus rose by a further +7.95 percent compared with 2019. If we look at the development of property prices for condominiums over the past five years, the price increase is even +39.69 percent.

The price level for new buildings is naturally even higher. However, in percentage terms, the prices of condominiums in this sector rose less than those of existing properties. One square metre of living space in a new building in Cologne cost an average of 5,517 euros in 2020, which is +4.51 percent more than in the previous year. Over the past five years, the prices for condominiums in Cologne have risen by an average of +27.33 percent.

The housing market in Cologne is also characterised by a persistently high price level, although prices here have not risen as sharply as rents recently. A single-family home in the Rhine metropolis cost an average of 701,184 euros in the second quarter of 2020. This represents an increase of +1.6 percent compared to the first half of 2019.

Property prices for multi-family houses in Cologne

Due to high demand, prices for residential and commercial buildings and apartment blocks in Cologne have been rising for years. The average offer price in the first half of 2019 was 3,253 euros per square metre. Prices and factors are currently continuing to rise in all districts of Cologne. Transaction figures, rents, prices and factors can be found in detail in our Residential and commercial properties market report 2020 (German only).

The purchase prices for single- and two-family homes and condominiums in Cologne depend to a large extent on their location. Therefore, a distinction is made between very good, good, mid-range and secondary locations. 

The classification of a district into a certain location area is influenced by various factors such as the existing infrastructure or the recreational opportunities. In particular, properties close to the city centre and located to the south of Cologne are in some cases significantly more expensive than in the outer districts. 

Cologne districts in very good locations include Lindenthal, Marienburg, Hahnwald, Klettenberg and parts of the new and old town. Single- and two-family homes in these locations achieve top prices of up to 6.5 million euros. The purchase prices for condominiums here are also well above the city-wide average: investors must pay between 7,000 euros and 18,000 euros per square metre of living space. For apartment buildings, square metre prices range between 3,200 and 5,000 euros. 

Cologne property prices are also at a high level in the good locations. Districts that fall into this category are mainly areas close to the city centre such as the old town, Deutz, Neuehrenfeld, Rodenkirchen and the new town. The price range there for single- and two-family homes averages between 1 million euros and 3 million euros. On average, square metre prices for condominiums range between 5,000 euros and 8,500 euros. For residential and commercial buildings, square metre prices range between 2,700 and 3,500 euros. 

Property prices are more moderate in the mid-range locations of Cologne, which include above all the areas east of the Rhine. Among others, the districts of Kalk, Mühlheim, Potz and Ensen fall into this category. Single- and two-family homes in these districts range in price from 650,000 euros to 1.55 million euros. Condominiums in these and other mid-range districts achieve prices between 4,000 euros and 7,000 euros per square metre of living space. For residential and commercial buildings, square metre prices range between 2,000 and 2,700 euros. 

The lowest investment hurdle is naturally found in districts in secondary locations. These include Höhenhaus, Holweide, Buchheim, Höhenberg and Vingst. In these locations, prices for single- and two-family homes start at 350,000 euros and reach a peak level of 700,000 euros. The average square metre price for condominiums is also comparatively low, ranging from 3,000 euros to 4,000 euros. Prices for apartment buildings already start at 1,500 to 2,000 euros per square metre.

There is currently no sign of a reversal in the trend of continuously rising property prices in Cologne. Tina Fröhlich from Engel & Völkers Köln sums up the market situation: "In recent years, Cologne has experienced a continuous increase in population, which is countered by a scarce supply of real estate. The real estate market in Cologne remains dynamic. Cologne's increasing attractiveness continues to ensure consistent and stable price increases. Strong buyer demand is leading to rising prices in all market segments. We have been able to discreetly broker just under half of the properties we offer to our search clients”.

You can obtain even more in-depth insights into the residential property market of Germany in a personal meeting with us. We look forward to hearing from you!

Jörn Freudenberg of Engel & Völkers Commercial Cologne classifies the Cologne market for residential and commercial buildings as follows: "The demand for real estate in the city of over one million inhabitants remains high. In particular, wealthy private clients with long-term investment perspectives invest in the cathedral city independently of banks. But the realisation that things cannot always go only upwards is reinforced by political intervention in the housing market for many market participants. This is one of the reasons why more and more owners are again deciding to sell at currently very high market prices.”

Factors, developments, rents and property prices in Cologne and a total of 67 German cities can be found in our current Residential and Commercial Property Market Report 2020 (German only).