Higher interest rates and inflation are the reason for the decline in real estate prices in Germany. This not only affects detached- or two-family-houses in the countryside or in the suburbs - but also the prices of condominiums in major cities such as Berlin, Hamburg, Cologne or Munich have fallen. For example, there was a year-on-year decline of 2.9% for detached- and two-family-houses and 1.6% for condominiums. The last price drop like this was in 2007, and prices are expected to fall further this year. High interest rates for financing and presistent inflation are the reason for the low purchasing power, since less and less people can afford financing with such high interest rates. Compared to 2021, prices fell by 3.6% in the 4th quarter of 2022. According to experts, the real estate market in Germany is still very stable to withstand this drop of prices, because there is still a shortage of housing. A collapse of the real estate market in Germany is not to be expected. Berlin, 25.03.2023
