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vdp Property Price Index

Rents and purchase prices for individual properties as well as their value-influencing factors are systematically collected in the vdp transaction database (vdp-Transaktionsdatenbank). On the basis of these data, hedonic methods are applied to construct property indexes that reflect purely the price movement of a particular real estate market. The vdp price index for owner occupied housing has been presented to the public in February 2010, the vdp Index for Office Buildings in May 2011.

With effect from 1 July 2009, work on the transaction database was transferred from the vdp to the newly established vdpResearch. This is meant to ensure comprehensive evaluations and analyses on an ongoing basis and to provide these data to participants in the transaction database.

Up until the fourth quarter of 2011, 21 Pfandbrief Banks have submitted information about more than 700,000 properties to the database. Since 2003, the vdp transaction database has provided an overview of the price trend on the German property market, for both Germany as a whole and for the individual regional and other sub-markets for specific property types. Given the extremely diverse nature of real estate, hedonic methods are applied which filter out the quality differences of the individual properties included in the database and purely measure the price trend.

vdp Price Index for Owner Occupied Housing

The following figures show the price trend for single family houses, condominiums and - as an aggregate of both property types - for owner occupied housing in Germany.

vdp Price Index for Single Family Houses in Germany

vdp Price Index for Condominiums Germany

vdp Price Index for Owner Occupied Housing in Germany

Based on 2003, the figures show an average price increase of 11.0 % for single-family houses and 11.2 % for condominiums over the period as a whole. Overall, both time series indicate a slight increase which has turned 2009 into a sideways trend. Since midyear 2010, the series show upturn again. The price index for owner occupied housing in total increased by 11.1 % within the whole period.

vdp Indices for Office Buildings

The following figures show the development of rents, cap rates and capital values for office buildings in Germany.


 

vdp Rent Index for Office Buildings in Germany

vdp Cap Rate Index for Office Buildings in Germany

vdp Capital Value Index for Office Buildings in Germany

vdp-Indices for Rents and Capital Values for Office Buildings in Germany

The graph depicting the vdp Rent Index for Office Buildings shows stability over the past eight years. Apart from cyclical fluctuations typical for office property markets, the overall picture here is one of sideways fluctuation. In the fourth quarter of 2011, the Rent Index was on the same level than it was in 2003. This demonstrates that the financial market crisis and subsequent overall economic recession in Germany has had only a muted effect on office rental levels.

The vdp Capital Value Index for Office Buildings shows somewhat greater volatility than the Rent Index. This may be attributed to the greater caution exercised by investors in downward market phases and the larger risk premiums which they thus demand. Particularly during the financial market crisis, the office market was dominated by a high degree of risk aversion relative to normal market conditions. However, when measured against changes in values in other countries, these fluctuations in property values in the German office market are comparatively modest. As the improving overall economic situation in Germany has become increasingly clear, this investment risk premium has begun to revert to pre-crisis levels. This reduction in risk premiums, along with the recovery in rental levels, provides an explanation for the upward trend in capital values over the past few quarters.



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Please find below the vdp Property Price Index in tabular form:

vdp Property Price Index QI2003-QVI2011
Further information about the vdp-transaction databank and the statistical evaluation can be found in the vdp-brochure “Real Estate Banking – Committed to Professionalism – Facts and Figures”, expenditures 2007/2008 (p. 50 ff), 2008/2009 (p. 58 ff) and 2009/2010 (p. 42 ff),   2011/2012 (p. 56 ff) and in our Annual Report 2010 (p. 48 f) (please see vdp release from 15.02.2012).  
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