Low interest rates and demand for homes is fuelling the real estate market and driving up prices, according to Postbank's new 'Wohnatlas 2020'.
In 2019, more than 90 percent of all German administrative districts and cities saw an increase in purchase prices, the study, which looks at how real estate prices are developing, found.
On average across Germany, prices rose by 9.3 percent compared to 2018 after adjustment for inflation – an even higher increase than in the previous year.
And according to the research it's just not cities where costs are going up, but also rural areas.
"Low interest rates, high demand and scarce supply – these were once again the most important price drivers for the real estate market in 2019," said Eva Grunwald, head of Postbank's real estate business."
And Grunwald said a reversal of this trend is "not in sight in most regions of Germany".
READ ALSO: Housing in Germany - here's where rent prices are going up (and down)
Munich remains the most expensive
The fact remains that nowhere in Germany is more expensive for properties than the Bavarian capital of Munich.
In 2019, for example, a square metre cost 6.2 percent more than in the previous year. The average value for apartments in existing buildings in the Bavarian capital is €8,079 per square meter.
In a comparison of the so-called 'Big Seven', the seven largest German cities, prices rose most sharply in Frankfurt am Main. On average, real estate buyers had to pay €5,687 per square meter in 2019, 11 percent more than in the previous year.
The German banking metropolis continues to rank second among the most expensive large cities.
The steep increase ensures that Frankfurt is set apart from the Hanseatic City of Hamburg, which is in third place with an average price per square metre of €5,054.
The table below shows the price per square metre in the seven biggest cities, plus the increase form the previous year.
Source: Postbank
Berlin is also catching up: prices in the German capital rose by almost 10 percent. With an average square metre price of €4,639 euros, Berlin has passed Stuttgart and is now in fourth place in the ranking of the seven big cities.
Frankfurt and Berlin were the only two cities where the price increase was above the national average of 9.3 percent. The map below shows the average price per square metres in the seven biggest German cities, as well as the situation across Germany.
Commuter belt is desirable
The price level continues to rise in the areas around cities – the so-called 'Speckgurtel' (commuter belt, literally fat belt),  the Postbank study shows.
Demand is high, and apartments and houses on offer are often sold quickly. Grunwald warned prospective buyers not to rush into things. "Those interested in buying should nevertheless definitely take the time to take a close look at their dream property," said Grunwald. "Individual properties could be overpriced and nobody should be pressured to buy."
Almost all of Germany's most expensive districts are in the south of the country.
READ ALSO: What you need to know about the German property tax that affects us all
The top 10 include nine Bavarian districts. In seven German districts, the average price per square meter for residential property has now passed the €5,000 mark.
The table below shows the top 10 most expensive districts in Germany, not including the seven biggest cities.
Source: Postbank
But the most expensive district in Germany is not in Bavaria: in North Frisia, which includes the popular islands of Sylt, Föhr and Amrum, as well as holiday resorts such as St. Peter Ording, the square meter costs an average of €6,452.
The previous year's study showed a slight decline in prices in North Frisia for the first time – but this year's study shows a 14 percent increase in the cost.
In second place in the ranking of the most expensive districts is Miesbach, Bavaria, with an average of €6,127 per square meter.
The Bavarian districts of Starnberg and Munich have also broken through the €6,000 mark. All three districts are located in the "Speckgurtel" of the Bavarian capital and benefit from a convenient location and public transport.
Comparatively high-priced regions can also be found in the north of Germany on the coasts and in the commuter belt of the other cities.
Price hikes due to short supply of housing
Three districts in Brandenburg, the neighbouring state to Berlin, were particularly hit hard by the price spiral.
The Uckermark registered the strongest increase in Germany with a huge 48 percent increase. Prices per square metre in the Elbe-Elster district shot up by almost 42 percent.
And in Frankfurt (Oder), too, residential property became more expensive by a third. Price increases for existing apartments were particularly noticeable in districts and cities in which there is a low supply of housing.
The table below shows the highest increases in percentages across regions.
Source: Postbank
Zweibrücken in Rhineland-Palatinate also experienced strong price increases. In Germany's smallest independent city, apartments became almost 36 percent more expensive on average. There were similar price jumps in Mansfeld-Südharz in Saxony-Anhalt. However, the square metre prices remained comparatively low last year at an average of €831.
The sharpest price hikes in the past year are therefore not in the major cities and their suburbs, but instead in less densely populated regions with a low and fairly cheap supply of properties.