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German residential property prices keep falling in Q1
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BERLIN (Reuters) -German residential property prices continued to fall in the first quarter of this year, dropping by an average of 5.7% year-on-year, even after the biggest slump on record in 2023, federal statistics office data showed on Friday.
BERLIN (Reuters) -German residential property prices continued to fall in the first quarter of this year, dropping by an average of 5.7% year-on-year, even after the biggest slump on record in 2023, federal statistics office data showed on Friday.
High financing and construction costs continue to weigh on Europe’s biggest economy, triggering the most severe property crisis in the country in decades.
Last year, home prices fell by 8.4%, the sharpest drop since the beginning of the statistical records in 2000.
According to a poll of 13 real estate analysts conducted by Reuters, prices will continue to fall in 2024 as a whole, with a decrease of 2% likely, bouncing back to 2% growth only in 2025.
Landesbank Baden-Wuerttemberg (LBBW) economist Martin Gueth said he expects the decline in prices to now come to a halt, noting rising demand in home ownership while the housing shortage is still high.
“In particular, households that want to use the property themselves are now increasingly coming back to the market as prospective buyers,” said Gueth.
The expected easing in monetary policy by top central banks around the world this year should also help, he added.
(Reporting by Rene Wagner, writing by Andrey Sychev, editing by Miranda Murray)
A housing crisis occurs when there is a significant lack of affordable housing, leading to increased prices and decreased availability for potential buyers or renters.
Residential property prices refer to the market value of homes and apartments, which can fluctuate based on demand, economic conditions, and other factors.
Monetary policy is the process by which a central bank manages the supply of money and interest rates to achieve specific economic objectives, such as controlling inflation.
Financial stability refers to a condition where the financial system operates effectively, with institutions able to withstand economic shocks without significant disruptions.
Demand in real estate refers to the desire and ability of consumers to purchase or rent properties, which can be influenced by factors like income levels and interest rates.
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