German Online Real Estate Market

This is a guest post from Ed Freyfogle, co-founder of nestoria.co.uk. Nestoria work together with over 40 property portals across Europe. This summer Nestoria Deutschland was launched.

State of the market
Unlike many other European markets, Germany has not experienced an appreciation in house prices over the last decade, and thus there is no bubble to burst now. This is for three main reasons. Firstly, the economy is only recently emerging from the cost of re-unification and rebuilding the East. Secondly, and perhaps most critically, the population is generally not very mobile (though this is slowly changing). There is no concept of a “property ladder”, and buyers generally purchase planning to live somewhere for life. And finally, many wealthy Germans purchase abroad, with Spain being a favourite destination.

Market Structure
The vast majority of German estate agents are small local players with very few recognisable nationwide or pan-regional brands. The exception to this rule are banks/building societies, many of whom also operate as estate agents.

The online property portal market in Germany is dominated by three major players. Clear leader in terms of usage and number of listings is immobilienscout24.de owned by Deutsche Telekom and part of the telco’s Scout Group which also operates portals in the other major classifieds categories.

The battle for second place is fiercely contested, with immonet (owned by Alex Springer, Germany’s largest publisher) slightly ahead of immowelt (originally started as an agent software business and now owned by major publishers Holtzbrinck, WAZ, and Ippen).

By and large all three portals offer a very similar palette of tools and features for consumers and agents, often copying each other relatively quickly with new features. immobilienscout24.de typically takes the lead in setting prices.

Beyond these three there are a few smaller property portals: s-immobilien.de run by banking group Sparkasse, regional portals operated by newspaper groups like sueddeutsche.de, kalaydo.de, or rheinmainclick.de, and brave newcomers like myimmoworld.de.

The most notable feature of the German market, and one that other portals from traditional newspaper backgrounds across Europe would do well to copy, is the well executed combination of print and online property advertising. Major publishers like Axel Springer have created best of breed integration for the advertiser across platforms, as a way of moving revenue from deteriorating print brands to the internet.

Other features of the German market

• All players accept listings directly from private sellers and present those listings alongside agent listings.
• Agent listings are of average to poor quality, often lacking photos and the address of the property.
• The market is only slowly opening its eyes to the new technical possibilities of platforms like blogs, videos, Google AdWords, etc

The best online source for information on the industry is Hannes Mehr’s excellent blog immobilienportale.com. Anyone seriously interested in the dynamics of the German market should read this year’s ImmoStudie (in German), a survey of over 1,000 agents about their marketing from Munich’s Ludwig-Maximilian Univerisity.

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