German property prices and rents rose more slowly last year as demand for space in smaller cities was hurt by a migration of workers to larger ones.
The BulwienGesa Real Estate Index, which combines commercial and residential prices and rents, rose 3.1 percent in 2012, the real estate research firm that compiles the data said today. In small cities such as Bremerhaven and Chemnitz, values rose 1.9 percent, BulwienGesa AG said. The index climbed 3.4 percent in 2011.
“The divisions in the German market have intensified,” said Thomas Vosskamp, head of data at the Munich-based company. “The provincial cities are feeling the demographic changes.”
Germany’s population has been shrinking since 2002. At the same time, inhabitants have moved to hubs such as Berlin and Munich, where jobs are generally easier to find. Property prices in large cities are also rising because investors are seeking a safe place to put their money amid the European debt crisis.
The index will probably show “moderate” growth in 2013, BulwienGesa said. The sovereign-debt crisis will continue to draw investors to the German real estate market, the company said.