Prices fell 10.2 p.c within the third quarter | EUROtoday

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Dhe costs for residential property in Germany fell once more at a document tempo within the third quarter. From July to September they fell by a mean of 10.2 p.c in comparison with the identical interval final 12 months, because the Federal Statistical Office introduced on Friday. This is the biggest decline for the reason that time collection started in 2000. The largest declines up to now had occurred within the first (-6.8 p.c) and second quarters of 2023 (-9.6 p.c). The fundamental purpose for that is more likely to be decrease demand because of elevated financing prices and excessive inflation. From the second to the third quarter alone, costs fell by 1.4 p.c: for the reason that peak in spring 2022, they’ve been steadily declining.

Significant value declines have been recorded in each cities and rural areas in the summertime. In the highest 7 metropolises (Berlin, Hamburg, Munich, Cologne, Frankfurt am Main, Stuttgart and Düsseldorf) the costs for single and two-family homes fell by 12.7 p.c in comparison with the identical quarter of the earlier 12 months. 9.1 p.c much less needed to be paid for condominiums. In the sparsely populated rural districts, single- and two-family homes have been 12.4 p.c cheaper, and residences have been 5.6 p.c cheaper.

“Until 2022, there was a speculative price bubble in Germany, one of the largest in the last 50 years,” mentioned Konstantin Kholodilin from the Macroeconomics Department of the German Institute for Economic Research (DIW). “Prices have been falling since then. The bubble has burst.” According to a examine by DZ Bank, the downward pattern is more likely to proceed in 2024 regardless of the anticipated turnaround in rates of interest. “We expect an annual average decline of half a percent to two and a half percent,” mentioned analyst Thorsten Lange.

Due to falling inflation, many economists anticipate that the European Central Bank (ECB) will provoke a financial coverage change subsequent 12 months and decrease its rates of interest. This signifies that mortgage loans are more likely to turn into cheaper once more. The key rate of interest is at present 4.5 p.c.