Dhe prices for residential real estate in Germany fell nationwide in the first quarter of this year by 6.2 percent compared to the same quarter last year. This emerges from a report by the real estate service provider McMakler. Compared to the fourth quarter of 2022, the minus was 1.9 percent. “In the first quarter of 2023 we are also observing declining prices for condominiums. The decline in prices has slowed down compared to the previous quarters. However, no real stabilization of the market can be forecast yet,” says Felix Jahn, head of McMakler.
The sharpest declines among the largest cities were recorded in Stuttgart and Frankfurt am Main at 4.7 and 3.9 percent for apartments, with the price declines for houses being significantly lower at a maximum of 0.7 (Hamburg). In a comparison of the federal states, the largest price declines for apartments were in Bavaria (minus 3.5 percent) and Saxony-Anhalt (minus 3.3 percent). House prices fell most significantly in Brandenburg (minus 1.8 percent) and Schleswig-Holstein. Holstein (minus 1.5 percent) back.
Despite falling real estate prices, real estate acquisition remains a challenge for buyers, especially due to difficult financing conditions. In order to counteract high interest rates on loans, buyers are now bringing more equity into their financing than they did a year ago. Potential buyers remained cautious despite the falling prices, which suggests that the asking prices are not yet aligned. The average equity contribution is around four percentage points higher than in the previous year and is currently around 20 percent, but has largely stabilized in the fourth quarter of 2022.
The real estate supply nationwide also increased by 2.1 percent in the first quarter of 2023. Significantly more properties were sold, especially in the north (Bremen +47.6 percent, Schleswig-Holstein +33 percent and Hamburg +28 percent). On the other hand, the supply in Saarland, for example, fell by more than 10 percent. McMakler puts the drop in demand across Germany at 2.4 percent compared to the fourth quarter of 2022. In Rhineland-Palatinate it fell by 17 percent and in Schleswig-Holstein by as much as 22.5 percent.
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