Although recent growth has partially offset the decline in prices over the past two years, housing prices are still 9% below their 2022 peaks as inflation and rising interest rates continue to put pressure on the sector.
The rise in housing prices contrasts with the situation in other sectors of the real estate market. The office and retail space sectors are experiencing difficulties as people work from home and shop online.
Industry experts expect that some market segments will experience difficulties in the coming months due to a weak economy, trade wars and geopolitical risks.
According to the German Real Estate Federation, the sector accounts for about one fifth of economic production and almost one in ten jobs, which exceeds the figures of the country's automotive industry.
The boom in the German real estate market, fueled for years by low interest rates, cheap energy and a strong economy, has ended as a sharp rise in inflation after the pandemic forced the European Central Bank to raise borrowing costs, and the shift to remote work led to lower office occupancy.Source: Global Banking
