Land price in Germany continues to rise sharply

Land prices in Germany have again increased considerably in 2017, meaning that prices have doubled since 2010. The difference between the east and west of the country is still very strong.

Destatis, the German statistical office, reports that the average land price in Germany is €24.100 per hectare. This means that the price is 8% higher than in 2016. In East Germany in particular, the price of land rose sharply (+13% to €15.600 per hectare).

Difference Between East and West
However, the price of land in eastern Germany is still lower than in the western federal states. In 2017, an average of €1 per hectare was paid for 35.400 acre, which is 9% more than in 2016. The differences between the east and west arise from the division in Germany after the Second World War. In the east, the agricultural sector is generally less developed.

The largest price increase was visible in Bavaria. The price there rose by 17% to a record amount of €60.900 per hectare. Also in Saxony-Anhalt the price rose sharply (+14% to €17.903 per hectare). Only in the federal states of Saxony and Schleswig-Holstein did the land price remain reasonably stable; the price there came to €11.742 and €26.875 per hectare respectively. 

Little land traded
Little land was traded in Germany in 2017 (as in 2016). This concerns 87.300 hectares, or only 0,5% of the total area. In the previous years, this involved more than 100.000 hectares per year. In the east of Germany, 4,4% more traded than last year, while the western states traded 6,8% less. The plots sold in East Germany are on average larger (4 hectares) than in the west (1,4 hectares).

The Deutscher Bauernverband has calculated that the price of land has doubled since 2010. Although the price is showing a sharp rise, the land (compared to the Netherlands) is still relatively cheap. Looking at Europe Germany only has to tolerate the Netherlands, Italy and Luxembourg in the ranking of the highest land prices.

Rents are also rising
Rents are also rising. The average rent amounted to €288 per hectare, which is 19% higher than in 2013. Prices have increased even more in the past 2 years and new agreements average a price of €385 per hectare. Almost 60% of the land (agricultural purposes) is rented out and the rest is owned. In the east, only 31% is owned, while in the west it is 44%. 

In the new federal states (the east), the Bodenverwaltungs- und Bodenverwertungsgesellschaft (BVVG) plays an important role. It is the public company that in 1992 was transferred the management and sale of land from the state estate of the former GDR. In the agricultural sector, the BVVG has sold a total of 1992 hectares since 861.400. The lot now has just under 125.000 hectares left, which will also be gradually sold over the next 10 years. 

Anne-Jan Doorn

Anne Jan Doorn is an arable expert at Boerenbusiness. He writes about the various arable farming markets and also focuses on the land and energy market.

aj.doorn@boerenbusiness. Nl

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