According to the Kiel Institute of World Economy (IfW), in the period from July to September 2023, average prices for ready-made apartments in Germany fell by 10.5% compared to the same period last year. Prices for houses and townhouses also decreased significantly over the year by 12.1% and 24%, respectively.
Apartments on the secondary market have fallen in price year-on-year in almost all the largest cities in Germany: by 17% in Dusseldorf, by 15% in Stuttgart and by more than 10% in Frankfurt, Hamburg and Munich.
Quarterly results also showed a decline. In Frankfurt by 1.6%, in Stuttgart by 1.9%, and in Berlin by 0.8%. Dusseldorf had the strongest drop by 6.6%. In addition to the seven largest cities, the trend was also observed in Leipzig (-4%), Duisburg (-4.4%), Munster (-6.2%) and Erfurt (-9.2%). However, there were exceptions – house prices rose in Potsdam (+4.2%) and Chemnitz (+5.2%).
According to IfW analysts, the main reason for the deterioration of the situation in the housing market is the increase in interest rates, due to which mortgage loans have significantly risen in price. Combined with high inflation, which reduces purchasing power, it becomes more difficult for people to consider buying a home. In general, all types of housing in the third quarter of the year recorded a third less sales compared to the same period last year. Compared to the average for the period from 2019 to 2021, sales fell by 50%.
Source: I Am Expat
