Real estate market - High interest rates and construction costs hinder real estate sales
High interest rates and construction prices continue to hamper the sale of real estate in Brandenburg. The number of registered sales contracts has further decreased, and the more pronounced decrease in sales volume is a clear sign of falling property prices," Henry Zunke from the Upper Expert Committee stated during the presentation of the real estate market report for the previous year. Therefore, fewer sales were closed for the second year in a row.
The magnitude of the sales decline is quite significant: The number of real estate sales in Brandenburg dropped from around 28,000 to roughly 24,000 - a decrease of 14%. The sales volume decreased significantly by one third compared to 2022. However, the dynamism of the sales volume decrease noticeably eased towards the end of the year, according to Zunke. The decline was particularly pronounced for first-time sales of owner-occupied apartments. The number of sales contracts decreased by 30% in the previous year compared to 2022. The sales volume even fell by 36%.
"Above all, the interest rate turnaround and rising prices for building materials and energy have significantly influenced the development on the real estate market with us," summarized State Secretary Markus Grünewald. As a result, property prices fell sharply in some places: The price for a ready-to-build single-family house plot dropped on average by 11% to 201 Euro per square meter. The average price for apartments in the Berlin metropolitan area fell from 399 Euro per square meter to 338 Euro per square meter. The prices for one- and two-family houses dropped on average by 8%.
The high interest rates and construction costs in Potsdam, a city in Brandenburg, are contributing to the challenges in the local real estate market. A Sale Agreement for a property might take longer to finalize due to these factors. The real estate market in Brandenburg has seen a decrease in registered sales contracts and real estate sales, leading to a significant drop in sales volume. The decline in the real estate market has resulted in lower interest for investors in the Brandenburg real estate market.
