German Housing Market Stalls Amid Rising Interest Rates
FT reports that in Germany, house prices rose more than 60 percent in the past seven years. However, the German property market has stalled since the European Central Bank started raising interest rates last summer to tackle inflation.
According to the property price index of the Association of German Pfandbrief Banks (vdp) the price changes are as follows:
Year-on-year change in prices (Q4-2022 compared with Q4-2021):
Residential/commercial properties overall: +0.8%
Residential properties in Germany: +2.1%
Residential properties in the top seven cities: +2.2%
Commercial properties: -4.4%
– Office properties: -2.6%
– Retail properties: -9.1%
Quarter-on-quarter change in prices (Q4-2022 compared with Q3-2022):
Residential/commercial properties overall: -2.0%
Residential properties in Germany: -1.8%
Residential properties in the top seven cities: -2.0%
Commercial properties: -2.9%
– Office properties: -2.4%
– Retail properties: -4.2%
The housing shortage in Germany may stanch a sharp decline in prices that could otherwise result from the current interest rate climate. Fewer than 250,000 apartment units will be built in Germany this year, down almost a fifth from 2020 and well below the government’s target of 400,000, according to Deutsche Bank economist Jochen Möbert (reported in FT).
Last Updated on February 10, 2023 by Ramin Seddiq