NEW YORK •The expected onslaught of up to 10,000 Brexit bankers could further exacerbate the already tense situation in Frankfurt's condominium market.
Residential real estate in the German city is often cheaper compared with London, making it more affordable for many in the financial industry.
Asking prices for condominiums have already increased by 10.7 per cent in the second half of last year over the same period in the previous year, according to a study by real estate service provider Jones Lang LaSalle (JLL).
Compared with 2004, the increase stands at 99 per cent.
"Any additional population, and even if it's just a few thousand bank employees, will continue to drive buying prices in Frankfurt," said Mr Julius Stinauer, associate director of valuation and transaction advisory at JLL.
"London's bankers are used to high prices, Frankfurt is cheap and housing is scarce, so Brexit could extend the upswing and increase the prices."
Mr David Schmitt, managing partner at broker Engel & Voelkers in Frankfurt, told a similar story.
"We are seeing increased interest from London," he said.
According to JLL, the average asking price for condominiums in Frankfurt in the second half of last year was €4,830 (S$7,900) per sq m.
In the premium segment, Engel & Voelkers calculated an average starting price of €7,500 per sq m for last year.
Colliers International Group cites an average selling price of around €11.952 per sq m for a two-bedroom apartment in the City of London for last year.
JLL attributes the recent sharp rise in prices in Frankfurt to a lack of new supply and high demand as a result of population growth.
In 2016, 3,670 new apartments were built in Frankfurt, according to JLL, while the company estimates the need for 10,000 apartments per year.
"Sufficient building activity is not possible because building sites in Frankfurt are scarce and expensive," Mr Stinauer said.
The population grew by 9.4 per cent between 2011 and 2016, while the housing stock had increased by only 3.9 per cent, data shows.
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