German Furniture Market Bounces Back Thanks To Housing Developments
The German furniture market accelerated its growth last year. In 2015, sales of the sector increased by 1.5 % to 25.9 billion Euros. In previous years, the growth rate was around one percent. One reason for this positive development was the increase in residential construction. This year, according to a study by Interconnection Consulting, peak growth will be achieved (+1.7% in value). In the following years, however, the growth will continue at a lower rate.
Last year, 4.5 % more dwellings were completed than in 2014. The number of building permits in the residential sector increased by 5.2 %. In addition to the increasing demand for housing also due to migration, a positive trend in real wages has led to a higher demand for furniture. However, despite higher sales, the market is flooded with cheap product lines. One reason lies in the low home ownership ratio of 52.5 %, which is a European average. “Tenants tend to invest less in furniture than homeowners,” this is how Neva Rukonic, author of the study, explains the trend towards low-cost products.
An exception to this trend is the kitchen segment, which also recorded the largest market share within the furniture market (30.6%). Revenues from kitchen sales increased by 2.4% last year. One reason is the increasing average prices of kitchens. It turns out that the increase in market shares in kitchens is connected to the strong growth in the premium segment in the entire furniture segment (2012: 22.9%, 2015: 24 %).
Overall, however, the mid-range and low-price segment continue to dominate the furniture market with a value market share of 66.6 %. In the future, according to Interconnection, the premium segment will particularly gain market shares from the luxury segment. The current market share of the luxury segment of 9.5% will fall to 8.6 % until 2019.
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