Prices for residential real estate: market turnaround expected

Prices for residential real estate: market turnaround expected

Residential property prices in Germany could now be on the way to recovery after a decline in 2023. Not only statisticians, but also real estate groups, such as Germany's largest real estate group Vonovia, are assuming a trend reversal. Vonovia boss Rolf Buch explained that the price decline had stopped and that the bottom in value development had been reached.

For Vonovia, this positive development marks a recovery after the company suffered heavy losses in the past due to the real estate crisis. The company is now recording profits and stabilizing the value of its real estate portfolio. The European Central Bank's interest rate turnaround also signals a possible stabilization of residential property prices in the second half of 2024.

Despite these positive signs, according to the Association of German Pfandbrief Banks (VdP), there remains a challenge for all players in the real estate markets. However, ImmoScout24 has found that buyer interest, especially in metropolitan regions, is increasing again and that asking prices in some regions are above the previous year's level.

Commerzbank, on the other hand, is a little more pessimistic and predicts that residential property prices in Germany could still fall somewhat. According to a study by the bank, there is still downside potential as buyers and sellers disagree on their price expectations. The discrepancy between the prices that can be financed and the price expectations of the owners could lead to a further decline in prices, especially for existing properties.