Performance depends more on population structure than on growth

Opportunities for investments in high-quality apartments are increasing, even in locations with a stagnant population. This is the result of a study by PATRIZIA Immobilien AG. According to the study, the demand for high-quality housing does not necessarily depend on a rising population. Merely 8.5% of rental growth and almost 20% of purchase prices could be traced back to it, the comparison in 114 selected German cities reveals. Rather than the population structure, desires and requirements of the tenants and buyers ultimately played a bigger role.

"It is true that rising population figures generate higher requirements, above all when completion figures and thus supply are low. However, this connection merely accounts for the quantitative area of the demand for housing," said Dr. Marcus Cieleback, Head of Research with PATRIZIA Immobilien AG. Moreover, investors should also pay attention to the qualitative area, which was currently growing more in importance than pure demand due to high-quality apartments. "While young families with a corresponding income look for family-friendly housing with an adequate infrastructure such as a kindergarten or school, older people are more likely to prefer apartments that are barrier-free, near medical and therapeutic facilities and that is well connected to public transport," explains Cieleback.” Additionally, in the high-quality range there were certain requirements regarding how an apartment was fitted, which older apartments often no longer met. However, the expert believed choosing such a location required a very precise analysis at macro and micro-level in order to recognize the needs of consumers.