Residential real estate prices, including apartments, in Germany fell by the largest margin since statistics began in 2000 in the third quarter. After soaring for over a decade since 2010 due to a real estate boom, German housing prices have been declining since the second half of last year and the drop is accelerating.
According to the German Federal Statistical Office on the 22nd (local time), residential real estate prices in Germany in the third quarter fell 10.2% compared to a year earlier. This is the largest decline since statistics began in 2000. Compared to the previous quarter, prices also fell by 1.4%.
The decline in residential real estate prices in Germany has been increasing this year, with -6.8% in the first quarter and -9.6% in the second quarter.
Experts interpret this as due to rising financial costs, energy transition policies, and continued rapid inflation making financing difficult.
Thomas Lange, an analyst at DZ Bank, told Handelsblatt, "During the real estate boom, all houses sold well, but now prices are clearly falling mainly for properties with disadvantages."
Residential real estate prices fell in both urban and rural areas, but especially dropped significantly in seven major cities: Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart, and D?sseldorf.
In these seven major cities, prices for single-family and multi-family houses plunged 12.7%, and apartment prices dropped 9.1%.
Experts have differing opinions on how long the downward trend in real estate prices will continue.
The Association of German Pfandbrief Banks (VDP) said the peak of the crisis has not yet come and expects it to occur next year.
Holger Horn, head of Munich Real Estate Bank, told Handelsblatt that residential real estate prices are expected to turn upward at the earliest in the year after next.
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