Prices for houses and apartments in Germany continued their downward trend in the first quarter of 2024, with homes selling on average 5.7% cheaper on an annual basis.
Compared to the last quarter of 2023, the loss in value of homes between January and March amounted to 1.1 percentage points, the Federal Statistics Office in Wiesbaden reported on Friday.
According to preliminary figures, this was the sixth quarter in a row that prices fell, both in cities and in rural areas.
The largest year-on-year declines of 9.5% were observed for detached and semi-detached houses in Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf.
Homes in these cities have fallen in price by an average of 4.6% within a year. In sparsely populated rural areas, buyers paid on average 6.7% less for detached and semi-detached houses and 2.4% less for apartments than in the first quarter of 2023.
Since mid-2022 – the height of a long housing boom – the German real estate market has been in decline. This is mainly due to the sharp increase in interest rates, which makes loans more expensive.
Many people can no longer afford their own home and investments are no longer profitable for large investors.
At the same time, demand for housing remains high, especially in cities, while new construction is in the doldrums due to higher interest rates and construction costs.
As a result, the number of building permits for new builds and flat conversions fell by 17% year-on-year in April. In view of the housing shortage, construction and real estate sector associations are calling for more state subsidies, especially in agglomerations.
