German cities including Berlin and Hamburg will see housing prices spike over the next 15 years as a growing refugee influx helps raise demand for urban housing, a Postbank report shows.
The German retail bank issued a report earlier this month that looked at how housing prices across 36 cities would be affected by factors including a forecast settlement of 1 million refugees who could be granted asylum by 2030.
Postbank explained that a one percent population increase alone would raise city apartment prices by an average of 3.5 percent and single-family homes by 1.9 percent.
While the report explains that areas of eastern Germany could benefit from a population boost, cities like Berlin and Hamburg are likely to face challenges as rising demand puts pressure on urban housing supplies.
It's important to note that projections published by Germany's statistics service Destatis show the German population is set to decline, even under the most bullish migration estimates.
Germany's population — which last stood at 80.8 million in 2013 — is expected to pop over a period of five to seven years depending on the extent of migration, but fall to at least 73.1 million by 2016. That's in part due to falling birth rates and an ageing populace.
Still, Postbank predicts increased urbanization rates, in part thanks to the expected settlement of refugees, in some of the country's most popular cities will drive up residential property prices.
In Berlin, where settled refugees are expected to boost the urban population by 4.7 percent, property prices are expected to soar 14.5 percent by 2030. Without the refugee influx, prices would rise 8.5 percent during that period, Postbank explained by email.
Meanwhile, Potsdam is expected to see the second largest rise in population rates at 4.5 percent and Hamburg at 4.4 percent, the report stated.
The rise in refugee numbers itself won't directly affect real estate costs, but will cause a domino effect on prices, the report explains. Demand will rise for subsidized housing, which will in turn drive up demand and costs for higher end rentals and ultimately drive up purchasing prices.
Berlin is already suffering from reduced housing stock, according to reports. German newspaper Frankfurter Allgemeine Zeitung reported in February that Berlin's senate was negotiating a 600 million euro ($664.73 million) contract with the Grand City Hotels Group hotel chain in an effort to find a housing solution for 10,000 refugees.
However, that plan has been attacked by those who claimed the money should be used to house Berlin's homeless population rather than non-nationals.
Similar concerns have been aired by organizations like Migration Watch U.K., which in December issued a press release opposing migration rates and the "serious consequences" it would have on the housing market. The U.K. currently predicts that an additional 95,000 homes would be needed each year in England to keep up with the government's highest annual net migration estimates of 217,000.
"Human rights organizations acknowledge that the surge (in asylum seekers) is a challenge for local communities including in Berlin," Hugh Williamson, director for Human Rights Watch's Europe & Central Asia Division told CNBC by phone.
"It's not surprising that there are predictions that this could affect the economy including the housing market, but the authorities including the state government in Berlin have a responsibility to treat asylum seekers fairly and in a humane way, and that includes providing them with basic facilities including housing," he added.