- Pfandbrief banks: Property price decline stopped
The sharp two-year decline in German real estate prices appears to have at least temporarily halted: According to data from the Association of German Pfandbrief Banks (vdp), both residential and commercial properties were slightly more expensive in the second quarter than in the first three months of this year. The vdp real estate price index rose by half a percent to 175.5 points, as the association announced in Berlin.
Pfandbrief banks: No sign of a trend reversal
In recent days, Volks- and Raiffeisen banks, as well as the Kiel Institute for the World Economy, have already declared a trend reversal on the real estate market, but Pfandbrief banks are more cautious. "It's still much too early to declare a trend reversal, but a relaxation of the difficult situation is emerging," said CEO Jens Tolckmitt. The vdp index is based on transaction data from over 700 credit institutions, according to the association.
Uneven development in the seven largest cities
Residential and owner-occupied properties were 0.5 percent more expensive in the second quarter than in the first, but 2.9 percent cheaper than the previous year. The development in the seven largest cities has been uneven so far this year: Prices fell slightly from the first to the second quarter in Düsseldorf (-0.5 percent), Munich (-0.4 percent), and Stuttgart (-0.2 percent), while they increased in Frankfurt am Main (+0.5 percent), Hamburg (+0.6 percent), Cologne (+1.1 percent), and Berlin (+1.2 percent).
Unwelcome news for tenants
There is still no talk of price reductions on the rental market: The average new rental prices for multi-family homes were 6.1 percent higher nationwide in the second quarter than a year ago, and 1.4 percent higher than in the first quarter.
Price expectation: Stagnant, not upward
The prices for offices and retail properties fell significantly by 7.4 percent year-on-year, but there was a slight increase of 0.4 percent from the first to the second quarter, according to the vdp index. Tolckmitt does not expect real estate prices to suddenly rise again, but rather a sideways movement for several quarters.
Pfandbrief banks, led by CEO Jens Tolckmitt, have expressed caution regarding a trend reversal in the German real estate market, despite recent declarations from other financial institutions.
The upward trend in real estate prices in Berlin, one of Germany's seven largest cities, might offer some hope, with prices increasing by 1.2% from the first to the second quarter.
