New record fall in house prices | EUROtoday

IThere had been some discussions in the true property business as as to if the extraordinary fall in house prices in Germany had continued. Now it is official: The Federal Statistical Office, whose house worth index figures are at all times printed with a slight delay after many figures from the true property business, is reporting an additional decline in residential property prices for the second quarter. Both in comparison with the identical quarter final yr and the earlier quarter. Only the “dynamics” of the worth decline, i.e. the extent of the share change in comparison with the earlier quarter, has just lately declined.

Compared to the identical interval final yr, prices fell by a median of 9.9 %. According to the workplace, this was a brand new record, the strongest annual decline because the time collection started in 2000. Compared to the earlier quarter, prices fell by one other 1.5 %. However, this was a smaller additional decline than in the earlier two quarters: in the primary quarter of this yr the decline in comparison with the earlier quarter was 2.9 % – in the final quarter of final yr it was 5.1 %. This may very well be an indication that the worth decline is slowly easing considerably.

What occurs subsequent? After an evaluation, Commerzbank just lately estimated that prices had been more likely to fall even additional. There remains to be a necessity for correction in the “high single-digit” or “low double-digit” share vary. The financial institution UBS had expressed the worry, significantly for Germany’s banking metropolis of Frankfurt, that it was not over but – and likewise pointed to Germany’s weak general financial improvement, in addition to the acquisition prices that had exceeded earnings and rents in latest years. Out of frustration with the federal authorities’s coverage, the Federal Association of German Housing and Real Estate Companies (GdW) and the homeowners’ affiliation Haus & Grund have canceled their participation in the deliberate “housing construction summit” this Monday in the Chancellery.

Old homes in cities are tough

Not all property prices fall the identical. The Federal Statistical Office has differentiated this. Remarkably, the worth declines had been lowest in sparsely populated rural districts. Condominiums right here had been 7 % cheaper than a yr in the past. Single- and two-family properties price 8.1 % much less. Compared to the primary quarter of 2023, prices for condominiums in sparsely populated districts fell by 2.1 %, whereas prices for single- and two-family properties even rose barely on common by 0.7 %. Where prices didn’t rise as a lot through the growth, they aren’t falling as a lot now.

This exhibits that this is a matter significantly in giant cities. And older buildings additionally appear to be disproportionately affected by the drop in prices as a result of debates about energy-efficient renovation.

The Federal Statistical Office reported an annual worth decline of 12.6 % for one- and two-family homes in the seven most vital German cities, together with Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf. This is comparatively excessive in comparison with the opposite classes and areas. Condominiums in these cities fell in worth by 9.8 % over the yr. Compared to the primary quarter of this yr, prices in giant cities continued to fall in each segments.