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Housing crisis in Germany: Analysis by the German Economic Institute predicts further price increases for the real estate market.
According to a report from www.nzz.ch, the housing crisis will continue to worsen in the coming months, this is the conclusion of a new analysis by the German Economic Institute. There is a small ray of hope for home sellers. The prices for new rental contracts in the seven largest cities in Germany rose by an average of 6.9 percent compared to the same quarter last year, in the surrounding areas by 5.5 percent and in rural areas by 5.2 percent. Berlin, Leipzig and Munich are particularly hard hit by rent increases, where rents have risen by 17 percent, 12.2 percent and 10.5 percent, respectively, in the last two years. The reason for this development is given by…
Housing crisis in Germany: Analysis by the German Economic Institute predicts further price increases for the real estate market.
According to a report by www.nzz.ch,
The housing crisis will continue to worsen in the coming months, this is the conclusion of a new analysis by the German Economic Institute. There is a small ray of hope for home sellers.
The prices for new rental contracts in the seven largest cities in Germany rose by an average of 6.9 percent compared to the same quarter last year, in the surrounding areas by 5.5 percent and in rural areas by 5.2 percent. Berlin, Leipzig and Munich are particularly hard hit by rent increases, where rents have risen by 17 percent, 12.2 percent and 10.5 percent, respectively, in the last two years.
The IW researchers cite the slowdown in new construction in the country as the reason for this development. The traffic light coalition's goal of completing 400,000 new apartments annually will not be achieved due to rising interest rates and higher construction costs. This results in a persistent shortage on the rental housing market, from which there is no relief in sight.
In contrast, purchase prices for real estate are stabilizing. In the seven largest cities, prices for condominiums remained unchanged compared to the previous quarter, while prices for single- and two-family homes only increased slightly by 1.6 percent. In the surrounding areas of the cities, the prices for condominiums rose by 0.9 and those for houses by 1 percent.
Economic researchers are cautiously optimistic that the price slide in the real estate market may be nearing its end, as a bottoming out phase has been reached. This suggests that the market is slowly stabilizing, however challenges in the rental housing market remain. This could potentially impact investments in the real estate market as demand for condos and houses could shift due to rising rental prices. Another development is that investors could increasingly invest in house sales as a more stable investment option.
Read the source article at www.nzz.ch