Survey: Slowing house price growth | Free press

With interest rates rising sharply, the boom in the German real estate market is waning – as more expensive loans weaken demand. According to the new analysis, prices in cities are rising more slowly.

Frankfurt am Main.

Research shows that the boom years in the German housing market cooled down in the first half of the year. According to the analysis of the main broker Jones Lang LaSalle (JLL), purchase prices of condominiums in the eight largest German cities increased by an average of 7.5 percent. compared to the same period last year. According to the analysis published on Wednesday, the increase was lower by half compared to the previous year. So the five-year average plus 9.3 percent was clearly undercut.

The dynamics in urban districts decreased even more. Here, the increase was 6%. in the first half of the year – 14.4 percent each a year earlier and 10.4 percent. on average over the past five years. On the other hand, in poviats the prices of owner-occupied housing increased by 9.4%, similar to the previous years. “In particular, the significant increase in interest in financing from the fourth quarter of 2021 is the reason for the reluctance of apartment buyers and the related weakening of the increase in purchase prices” – explained Sebastian Grimm, expert JLL.

The analysis is based on offer prices only, not offers. Nevertheless, the study, which is based on thousands of advertisements in each of the major cities, shows a downward trend in the housing market. Analyzes of several real estate portals have shown that the boom is weakening. In the second quarter, demand for real estate fell by 36%. during the year, according to data from Immoscout24. And Immowelt reported a stagnation or slight decline in asking prices in 7 of the 14 largest cities.

The return of interest rates slows down the rise in prices

Interest rates have more than tripled in the last few months and have risen above the three percent limit for ten-year funding. Experts from Landesbank Helaba also believe that interest rate returns will “markedly slow down” the rise in prices in the housing market. However, there is a dispute among experts as to whether there will only be stagnation or a significant drop in real estate prices.

Official real estate price data from the Federal Statistical Office for the first half of the year are not yet available. In the first quarter, prices hardly increased until the fourth quarter of 2021 (plus 0.8%). Compared to the same quarter last year, there was an increase of 12 percent.

According to the JLL study, the development of rents in the first half of the year is more diversified. Increase by 3.7% in the eight largest cities it was lower than the five-year average (4.3%), but higher than the year before (2.4%). Asking rents in urban districts increased by 3.3%. – a year ago, the increase was 8.2%, and the five-year average was 5.2%. There were hardly any changes in asking rents in the districts.

“The upward trend in rents in non-metropolitan cities has waned. On the other hand, rents in the immediate vicinity of major cities continue to rise more than in the cities themselves, “said Grimm. This is due to evasive movements. (dpa)

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