Prices for residential real estate in Germany fell significantly in some cases in the third quarter
According to a study, residential real estate prices in Germany fell significantly in the third quarter. Condominiums fell in price by an average of 1.5 percent from July to September compared to the previous quarter, according to the Kiel Institute for the World Economy (IfW) on Thursday. Compared to the same quarter of the previous year, the decline was even greater at 10.5 percent. The downward trend was even more pronounced in other residential segments. Single-family homes cost 3.2 percent less than in the previous quarter and 12.1 percent less than a year earlier. For multi-family houses, the reductions were as high as 5.9 and 24.0 percent.
"The crisis on the German real estate market is continuing," said IfW President Moritz Schularick, summarizing the results. "The ECB's interest rate hikes have triggered a clear downward trend reversal on the German housing market, and the bottom is not yet in sight." The European Central Bank (ECB) has raised its key interest rate to 4.5 percent in order to combat high inflation.
Around a third fewer sales were registered across all market segments than in the previous year. Measured against the average for 2019, 2020 and 2021, the slump is even as high as 50%. "The falling transaction figures indicate that only a few sellers and buyers are coming together at the current prices." This is bad news, especially with regard to the new construction business - "for the economy, but also for Germany as a business location, which urgently needs new living space in cities in order to be attractive for locally mobile skilled workers," said Schularick.
Source: www.ntv.de
