Real estate prices in Germany are on the rise again: experts expect rising purchase prices and rents

Real estate prices in Germany are on the rise again: experts expect rising purchase prices and rents

According to a report by www.n-tv.de,

More money can be earned again by selling residential property in the last quarter of 2023. As an IW study shows, prices for apartments and houses are rising again. According to the assessment, the bottom has now been passed. Rents are even higher.

According to new findings from a study, real estate prices in Germany appear to be rising again. Prices for condominiums and one- and two-family homes rose by 0.8 percent and 0.6 percent, respectively, in the last quarter of 2023 compared to the previous quarter. This indicates a period of bottoming in the market after previously experiencing a larger price reduction. Nevertheless, the price level has still fallen by more than eight percent compared to the first quarter of 2022. However, the experts at IW Cologne expect the purchasing market to slowly return to normality. Transaction numbers are likely to increase, but a sharp return to the very high volumes of 2021 is unlikely.

In contrast, rents are rising continuously; new contract rents in the fourth quarter are 5.3 percent higher than in the previous year and 1.6 percent more expensive than in the previous quarter. Rental prices have risen sharply, particularly in the largest German cities. The IW warns that the shortages in the rental housing market will continue and that even lower completion figures can be expected. This could lead to young families increasingly looking for purchasing opportunities, which in turn could cause price developments to return to a moderate growth path.

The results of the IW study indicate that the real estate market in Germany has reached a bottoming phase, but is confronted with rising rents and a continued shortage of apartments. It remains to be seen how the market will develop in the future.