What does a much worse second wave of coronavirus mean for house prices? Germany offers a clue

As in Britain, the pandemic has changed buying patterns. Thomas Drabel, of estate agency Savills, said overall transactions in 2020 were up 10pc to 15pc compared to 2019. 

Andreas Pichotta, of Sotheby’s International Realty estate agents, said the rise of working from home has pushed up demand in city suburbs.

In 2019, 90pc of buyer inquiries were for properties in central Berlin, said Mr Pichotta. “Since the spring last year, I would say that at least 50pc of inquiries are for a house outside the city.”

Prices are rocketing. In certain commuter belt areas outside the Berlin city border but within the Bundesautobahn 10 orbital motorway that circles the wider area, prices have jumped 50pc in a year, said Mr Pichotta. “It is crazy, but it’s true.”

Lockdown hasn’t hit the market

As in Britain, the German property market remains fully open. Kai Enders, of Engel and Völkers estate agency, said the current lockdown has not affected demand.

Some buyers, however, are newly cautious about going to viewings. Oliver Banks, of Knight Frank, said: “There has definitely been a slowdown in inquiries in the local market since mid-December.”

The second wave of the pandemic has brought logistical delays – akin to but not as extreme as those here. “Usually the average time between reservation and completion is seven weeks; now it is three months,” said Mr Banks. 

Berlin has also been affected by a drop in international buyers. Their share of the market in the capital has halved since the pandemic began, said Mr Drabel. 

The domestic market has more than filled the gap, but the international absence is taking its toll on the top end of the market. Mainstream Berlin prices were up 4.6pc year-on-year between July and September, according to Knight Frank, but the city’s prime market dipped 0.5pc in the spring and rose by only 0.9pc in the summer.

Mr Drabel expects pent-up demand will flood the market when the virus recedes, with a further 15pc to 20pc increase in transactions. “Once the vaccine comes through, all of this store of international requests will hit the market with a huge boom,” said Mr Drabel. 

Something similar could happen in London’s prime market, if the Brexit deal is enough to encourage investors.

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