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Market Analysis

German Residential Property Prices Decline in Q1
Amos Simanungkalit · 10.8K Views

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German residential property prices continued their decline in the first quarter of this year, dropping by an average of 5.7% compared to the previous year, following a record slump in 2023, as reported by federal statistics. High financing and construction costs remain significant burdens on Europe's largest economy, contributing to its most severe property crisis in decades.

In 2023, home prices experienced an 8.4% decrease, marking the steepest decline since records began in 2000. According to a Reuters poll of 13 real estate analysts, prices are expected to continue falling throughout 2024, with a projected decrease of around 2%, before potentially rebounding with 2% growth in 2025.

Martin Gueth, an economist at Landesbank Baden-Wuerttemberg (LBBW), anticipates that the price decline will stabilize, pointing to increasing demand from prospective homeowners amidst ongoing housing shortages. "Households looking to occupy properties themselves are increasingly returning to the market," he noted.

Gueth also highlighted the potential impact of expected monetary policy easing by major central banks worldwide throughout the year.

 

 

 

 

Paraphrasing text from "Reuters" all rights reserved by the original author.

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