HOUSING property PRICES in Germany fell sharply in the second quarter, data from the statistics office showed today, reflecting the impact of high interest rates on demand. Property prices plunged in the period from April to June by 9.9 percent compared to the same period last year, the strongest drop since Destatis began collecting data in 2000.

In Berlin and Hamburg apartments cheaper by almost 10%, houses even more

On a quarterly basis they decreased by 1.5 percent. In cities such as Berlin, Hamburg and Muenchen, apartments were 9.8 percent cheaper than in the second quarter of last year, and family houses by 12.6 percent. In sparsely populated, rural areas, a milder decline in prices was recorded, so apartments became cheaper by 7.0 percent, and family houses by 8.1 percent.

Residential property prices in Germany have been falling since the end of last year, Destatis data show, revealing an ever deeper decline, by 3.6 percent in the fourth quarter last year and by 6.8 percent in the first three months of this year.

Demand decline under pressure from high interest rates

The price decline reflects weakening demand under pressure from high interest rates, which prompted the leading German property development group Vonovia to postpone plans to build 60 thousand apartments.

The company also points to high construction costs, which, according to a spokeswoman, rose from around three thousand euros per square meter to around five thousand euros per square meter.

Source:index.hr