AA trend reversal is becoming apparent in the German real estate market: For the first time since 2011, real estate prices have fallen again in a quarterly comparison, as the Association of German Pfandbrief Banks (VDP) determined in its current real estate price index. Although prices have risen again compared to the same period last year, by 4.7 percent. But compared to the second quarter, they fell by 1.0 percent. Even residential real estate became cheaper by 0.7 percent in a quarterly comparison, while it rose by 6.1 percent compared to the third quarter of the previous year. The figures from the real estate association IVD Süd on the development in the southwest also speak in favor of the trend reversal. Real estate prices there have risen, but not as much as they were half a year ago.
“The purchase market for residential real estate is in upheaval given the current uncertainties and upheavals,” said an IVD spokesman. It is quite possible that, given rising interest rates, prices could stagnate in the future or even fall temporarily – especially in the big cities. Savings Bank President Helmut Schleweis pointed out in mid-October that the demand for real estate loans has fallen.
As the consulting firm Barkow Consulting reported on the basis of current figures from the European Central Bank and the Bundesbank, the mortgage lending business of German banks fell by 28 percent in September compared to the same month last year. New business had already turned negative in June. Martin Güth, analyst at LBBW, expects the downward trend in real estate prices to continue in the coming quarters.
