New Scoring for Residential Locations with Strong Growth Prospects

New Scoring for Residential Locations with Strong Growth Prospects

22.11.2018 Author/s: Björn Bordscheck
The micro variable “attractiveness of residential location” is overweighted in the model because it is composed of several sub-criteria.

From an investor’s point of view, economically robust and widely diversified cities are often more attractive long-term than “flash-in-the-pan” cities that make headlines with fast, if temporary, growth or overblown media coverage. Housing markets represent a good case in point as it will often take a closer look before their attractiveness becomes apparent: compared to many trend-setting cities, they tend to be affordable for tenants still.

Even Weaker Cities Have Attractive Residential Locations

The survey’s combination of macro- and micro-environments reveals an interesting connection – that arguably follows the top-down principle. For one thing, the analysis suggests that the blend of macro- and micro-environment criteria plays a key role for the site selection. Initially, however, the focus should be on the macro-perspective because, in principle, only an economically intact location will attract interest and thereby prompt incoming migration; a sound micro-environment rarely triggers investments in and of itself. Only in the next step do factors that directly relate to the immediate surroundings come into play. From an investor’s point of view, even an underperforming macro-environment can offer attractive residential locations for real estate investments.

Conclusion: Keep an Open Mind for Surprising Insights

Sustainably successful investments in residential real estate take trends and long-term developments on the macro-, micro- and property level into account. Carefully studying the micro-environment plays a decisive role in the case of residential real estate.

Principally speaking, the macro-level factors are more important than micro-factors. But as this latest survey shows, you can find very attractive residential micro-locations even in cities with a somewhat inferior quality of its macro-environment. The size of a city is negligible in this context: You will easily find Class D cities with better scores than some of the Class A cities.

As the real-life examples in the survey show, assessment of the macro- and micro-factors will sometimes return unexpected insights.

  • Future-proof residential locations take centre stage for residents (real-life example: Freiburg-Vauban)
  • Sustainable success factors define future-proof residential locations, more so than short-term trends (real-life example: Munich-Harthof)
  • “It’s all in the mix” – future-proof residential locations must take both macro- and micro-criteria into account (real-life example: Gelsenkirchen-Buer)
  • German Class D cities play in the premier league when it comes to housing (real-life example: Jena-Zentrum)
  • Diversified economic strength and innovation combined with affordable housing – resilient and successful (real-life example: Hanover-Linden-Nord)


Note: The full-length survey “Future Locations” (in German) is available for download here.

We also recommend reading a blog post by Wealthcap (in German) about the Business Dialogue with Prof. Dr. Elisabeth Merck, Commissioner of Urban Development for Munich, Gabriele Volz, Managing Director of Wealthcap, and Dr. Heike Piasecki, Head of Branch Munich at bulwiengesa.

Contact person: Björn Bordscheck, Head of Division Data Services at bulwiengesa, bordscheck [at]