Residential real estate prices in Germany fell by 3.6% in Q4 2022, the biggest drop in 16 years, according to the country’s Federal Statistical Office.
This was the first year-on-year price decline since the end of 2010 and, compared to Q3 2022, the drop was even more pronounced at -5%.
According to the Federal Statistical Office, pushing purchase prices down was lower demand due to increased financing costs and continuing high inflation.
Both in the cities and in the rural regions, price declines were recorded for the most part in Q4 2022.
Prices for detached and semi-detached houses in large cities fell by 5.9%, while prices for condominiums were only 1% lower.
In sparsely populated rural districts, houses were 5.5% cheaper, while condominiums were 0.1% more expensive compared to Q4 2021.
In the top 7 metropolitan areas (Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf) prices were down by 2.9% y/y for detached and semi-detached houses, while flats were 1.6% less expensive.
In the annual average for 2022, prices for residential property rose by 5.3% due to price hikes in the first three quarters.
Experts expect the price decline to continue in 2023 by between 4% and 10%.