A look back at the year 2023

The review of the past year provides an initial outlook for the new year. How will things continue? Which developments point the way to the future? Which expectations are justified?

More people were living in Germany at the beginning of the year than ever before. Immigration was the main reason for the population growth to a record level of around 84.4 million people.

Population growth has put pressure on the housing market. In 2022, the number of completed flats was 295,300, well below the German government's target of 400,000 new flats per year. The current new construction figures do not indicate a trend reversal. Many building materials will be significantly more expensive in 2023 than before the energy crisis, with prices for new residential construction rising by more than 15 per cent within a year in February 2023.

The last German nuclear power plants have been taken off the grid. Instead, more electricity is being imported from abroad, while domestic electricity generation from wind power and photovoltaics has changed comparatively little.

More people were on the move in the summer holiday month of July than in any other month since the coronavirus pandemic. The labour market reached an all-time high in autumn with 46 million people in employment. A slight increase in real wages can be seen as a positive sign. Inflation weakened further and reached its lowest level since June 2021.

Property prices in Germany fell in 2023 for the first time since 2010. Building plots and owner-occupied homes in major cities are particularly affected. Residential property prices fell by an average of 10.2 per cent in the third quarter of 2023 compared to the previous year. The number of property transactions fell by 16 per cent compared to the previous year.

First positive signs: the ifo business climate index rose for the third time in a row in November. The German economy is consolidating at a low level. Property prices are gradually stabilising.

(Photo: © Markus Winkler, Pixabay)