German home prices halt decline in fourth quarter but outlook uncertain

FRANKFURT (Reuters) - German residential property prices rose in the fourth quarter, halting a decline in place since 2022 by gaining 1.9% year-on-year, federal statistics office data showed on Tuesday.

But the outlook for the sector remains uncertain, with a recent increase in borrowing costs clouding prospects.

Home prices began their decline in the third quarter of 2022, after the European Central Bank began a sharp increase in interest rates to curb rampant inflation, sparking Germany's worst real-estate crisis in decades.

The pace of price declines has slowed over the past year, though the outlook for the broader property sector - especially offices - has been muted.

(Reporting by Tom Sims, Editing by Friederike heine)