Expert: Real estate market in Germany at record low - financial crisis inevitable

Expert: Real estate market in Germany at record low - financial crisis inevitable

According to a report by www.fr.de,

A report shows how bad the German real estate market is. Sales have reached a record low. There is no improvement in sight. According to the Germany 2023 real estate market report, real estate sales in 2022 fell to their lowest level since 2009. 866,000 real estate sales represent the lowest value in the comparable period since 2009. Total sales also fell by the same amount, namely from 375 to 301 billion euros. The reasons for this development are numerous. The experts cite rapidly changing general conditions, including sharply increased construction costs as a result of material shortages and increases in cost, supply bottlenecks and higher energy prices due to the war in Ukraine, as well as rapidly rising interest rates.

The real estate market in Germany is clearly feeling the effects of these factors. According to report co-author Peter Ache, very low sales figures are also expected for the first half of 2024. The falling sales figures also have an impact on prices: According to a study by the German Institute for Economic Research (DIW), prices for houses and apartments fell in 2023 for the first time since 2010. This price decline was attributed to worsening financing conditions as a result of higher interest rates.

The development on the German real estate market is worrying and is expected to continue in the future, as the rapidly changing conditions will continue in the coming years. Prices are expected to continue to be under pressure as market dynamics change and demand for property declines. This could lead to further challenges for the industry and requires a rethinking of the market situation and adapting strategies to address these challenges.