Prices for residential real estate in Germany fell more sharply in one year in the second quarter than ever since statistics began in 2000. Apartments and houses fell on average by 9.9 percent compared to the second quarter of 2022, according to the Federal Statistical Office announced Friday in Wiesbaden.

It was the strongest decline since the time series began in 2000. Compared to the previous quarter, however, the decline of 1.5 percent was smaller than in the two previous quarters. At that time, residential properties had fallen by 2.9 and 5.1 percent respectively compared to the previous quarter.

Building interest makes loans more expensive

According to the information, prices have been falling since their peak in the second quarter of 2022. The main reason for the turnaround in the real estate market after years of boom is the sharp increase in building interest rates, which have made loans significantly more expensive. Added to this is stubbornly high inflation, which reduces people’s purchasing power. Many people can no longer afford to buy real estate.

Prices fell on average in both cities and rural regions in the second quarter. They declined more sharply in the cities. Particularly significant declines compared to the same quarter of the previous year were recorded in Berlin, Hamburg, Munich, Cologne, Frankfurt am Main, Stuttgart and Düsseldorf.

Here, single- and two-family houses fell in price by 12.6 percent, and buyers had to pay an average of 9.8 percent less for apartments than a year before.