For a long time, Germany has had a strong and stable housing market with a consistent flow of high-priced properties changing hands. However, analysts are now forecasting a potential shift in this stability in the coming years.
Economic experts anticipate that the German housing market could experience price decreases of up to 20% to 25% by 2023. According to Jochen Moebert, a macroeconomic analyst at Deutsche Bank, the recent drop in mortgage rates of about 5% since March would require higher rental yields for investors, leading to an inevitable price correction.
Moebert highlighted the most significant price declines occurring between June and July, with more moderate decreases in the following months. He also noted a positive trend for investors in the market.
The looming price adjustments are primarily attributed to global economic challenges such as recession and escalating fuel expenses, as stated by Michael Voigtländer from The Cologne Institute for Economic Research.
Even though a downturn appears likely, some analysts are cautiously optimistic about the market’s resilience. Bundesbank Vice President Claudia Buch stated that while the growth in house prices is slowing down, overall, prices are still increasing gradually.
Buch emphasized that there are currently no indications of a drastic crash in real estate values or a significant decrease in overvaluations.
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