Property prices stagnate or fall depending on the region

The price development of real estate is closely monitored. On the one hand, the large real estate portals on the internet register the asking prices. In addition, scientific institutes and platforms for real estate financing keep meaningful indices. All of them are now reporting falling property prices.

In September 2022, the Europace House Price Index continued to fall. Falling property prices are registered in the condominium and existing one- and two-family house segments. Condominium prices fell the most in August 2022. New construction prices are slightly on the rise again. The overall index decreased by -0.25 per cent compared to the previous month. In the same period last year, prices still rose by 7.97 percent.

The empirica Institute reports in its property price index: "Germany is not suffering from a shortage of living space." Contrary to popular opinion, the institute notes, "Housing consumption is obviously too cheap." This applies in particular, it says, to living in spaces that have become too large after the children have moved out. Because existing rents are currently far below new contract rents, moving into a smaller flat is usually not worth it, he says. The housing shortages in the big cities are not the result of a shortage, but are obviously a distribution problem. The problem could be alleviated by lowering transaction costs, deregulating existing rents and increasing property tax, empirica advises.

The ImmoScout24 Residential Barometer shows that the purchase market for residential properties normalised in the third quarter. Although demand continues to shift from the purchase market to the rental market, it is levelling out above the pre-Corona level for purchase properties. In Germany as a whole, residential property for sale continues to experience a slight price increase, albeit more moderate than in the previous quarters.

The immowelt Price Compass reports an increasing trend reversal and falling property prices across the board. Due to the increase in construction interest rates, fewer and fewer people can afford home ownership. Already in the 2nd quarter of this year, the reduced interest in condominiums in many cities had put an end to years of price increases. In the 3rd quarter, the turnaround in the real estate market was now complete.

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