There is no term that characterises the German market as much as ‘dynamic’. Yet the market is complex, subject to many factors and, most importantly, multilayered. The latest Ziegert Report is therefore taking the bold step of applying a new perspective to German cities. We take a multidimensional look at market dynamics and observe market developments in relation to city developments. To this end, this report is introducing a new measurement: the Dynamic Telegraph. It juxtaposes transactions with the dynamic of the relevant city. What results is an important accompaniment for decision-making in the housing market.
How is the German market for condominiums developing? When it works, supply and demand match each other and produce transactions. A functioning market is constantly in motion and offers variety and perspective. No one is interested in a marketplace where stagnation is the order of the day. However, market dynamism is more than the result of individual factors and the frequently used, one-dimensional view. That is why we are adding a new point of view and focusing our gaze on more than prices or examining sales. We are moving to the meta level and stepping into the proverbial crow’s nest for you to compare transaction dynamism with city dynamism in our Dynamic Telegraph.
The Dynamic Telegraph is based on an engine order telegraph that acts as a device for communication between a ship’s engine room and its bridge. The nostalgic, maritime control of a telegraph and its characteristic presentation make it outstanding for illustrating the interplay of a city’s dynamic with its transaction dynamic. It is based on data specially collected, processed, put in context and analysed as part of a laborious research project conducted by the Ziegert Research team. The result provides insight into two things:
The transaction dynamic gives information about how the number of transactions for new-build housing marketed for the first time in 2018 should be judged when compared over a longer time span. We are interested in the momentum of the market. How has the number of transactions developed over the last three years? How does this compare with the median found in 5, 10, 15 and 20-year comparisons?
The city dynamic shows how dynamically a city has performed. The results of a city scoring prepared by ZIEGERT Research were used for this analysis. It draws on all relevant, fundamental data – demographic and socioeconomic as well as in terms of a city’s economic development.
The Dynamic Telegraph offers a unique opportunity to put the two dynamics beside each other and thereby reveal discrepancies, inconsistencies and parallel developments as well as point out potential. In particular, is the development of the studied market in keeping with the development of the city?
We want to invite readers to take a critical look without having to rely on typical explanations of patterns, for example, by justifying supposedly high prices as the cause of a particular effect. We look forward to engaging in a dialogue with you!
CITY DYNAMIC: from 0 to 10
HIGH: 7-10 / MEDIUM: 3-7 / LOW: 0-3
TRANSACTION DYNAMIC:from FULL ASTERN to FULL AHEAD
FULL ASTERN: -200 to -100
HALF ASTERN: below -100 to -50
SLOW ASTERN: below -50 to -1
SLOW AHEAD: 1 up to just under 50
HALF AHEAD: 50 up to just under 100
FULL AHEAD: 100 to 200
* Apartment New Construction
CITY DYNAMIC: HIGH: 8
TRANSACTION DYNAMIC: SLOW ASTERN: -25
How to read the illustration
The settings for the Transaction Dynamic range from ‘full ahead’ (highly dynamic and therefore full steam ahead) to ‘full astern’(not dynamic and therefore back up). For Leipzig, a housing market still on its training wheels compared to the rest of Germany and possessing enormous potential for growth, the Transaction Dynamic indicates ‘half ahead’. In a more mature market such as Stuttgart, the transaction numbers have been sinking both currently and in previous years: ‘full astern’. The Transaction Dynamic forms a kind of propeller that only develops a good momentum when given the right commands from the bridge and when there are the right influences in the engine room.
In this case, the City Dynamic would be the ship’s bridge, which can see further than the propeller has so far driven. For example, if one were to look solely at the status quo, the economic environment and location quality, Munich would be the frontrunner. When assessed for dynamism on a scale of 1 to 10, this lead is lost due to weak sociodemographic development, leaving Munich in the middle for its city dynamic. Berlin, on the other hand, keeps developing at rapid speed in all areas and achieves a peak value of 7.70. The Dynamic Telegraph indicates ‘highly dynamic’.
You can find explanations in each City Spotlight and in the information box under each Telegraph.