Real estate prices in Berlin have only known one direction for years – upwards. But there are signs of a trend reversal. shutterstock
Residential real estate prices in Germany are falling more than ever since records began in 2000. In the first quarter of 2023, prices for condominiums and residential buildings were an average of 6.8 percent lower than a year ago. Compared to the fourth quarter of 2022 alone, residential real estate was 3.1 percent cheaper.
The prices for residential real estate in Germany fell extremely sharply at the beginning of the year. Condominiums, single- and two-family homes were an average of 6.8 percent cheaper in the first quarter than a year ago, the shared Federal Statistical Office on Friday with It was the sharpest decline in real estate prices within a year since the time series began in 2000. Compared to the fourth quarter of 2022 alone, residential real estate was 3.1 percent cheaper on average.
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By the end of 2022, the statisticians had already identified noticeable price declines after years of the real estate boom. One reason for the turnaround in the real estate market is the rise in construction interest rates, which have made loans much more expensive. Added to this is persistently high inflation, which reduces purchasing power. Many people can no longer afford real estate. The banks’ new business with residential real estate loans to private individuals has been on the ground for months, in April it collapsed again by around half, according to Bundesbank data.
Prices fell at the beginning of the year both in cities and in rural areas. They declined more in the cities. The largest declines compared to the previous year were recorded in the metropolises of Berlin, Hamburg, Munich, Cologne, Frankfurt am Main, Stuttgart and Düsseldorf. Here, single and two-family houses became cheaper by 10.4 percent, and 6.4 percent less had to be paid for apartments than in the first quarter of 2022.
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dpa/PK