2023-11-16 17:02:16
Average residential property prices continued to fall on average in October. The Europace house price index, which is based on data from the financing platform Europace, which belongs to the listed company Hypoport, fell both compared to the same month last year and the previous month.
Over the year, the index fell by 4.17 percent, compared to the previous month by a minimal 0.08 percent. However, many other indices for real estate prices have recently shown higher price declines over the year.
According to Europace, there were differences depending on the property type. The prices for condominiums fell by 6.83 percent compared to the same month last year and by 0.37 percent compared to the previous month. The prices for existing single- and two-family homes fell by 7.66 percent compared to the same month last year and by 0.51 percent compared to the previous month.
In contrast, the prices for new one- and two-family homes rose by 1.61 percent compared to the same month last year and by 0.55 percent compared to the previous month. Stefan Münter, co-CEO and board member of Europace, spoke of a “moderately normalizing market”.
Building interest rates are now falling slightly
The European Central Bank (ECB) continues to try to combat inflation with persistently high interest rates, among other things by influencing interest-sensitive sectors such as the real estate sector. ECB President Christine Lagarde firmly opposed speculation on the financial market that the central bank might start thinking about cutting interest rates in the coming year; this is “completely premature”.
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ECB representatives recently tried to make it clear in speeches why the fight against inflation in the euro area has not yet been won.
Nevertheless, according to figures from the consumer platform Biallo, building interest rates had recently fallen slightly to 4.06 percent. In any case, after the publication of his institute’s figures for the third quarter, macroeconomist Moritz Schularick from the Kiel Institute for the World Economy (IfW) was of the opinion that there was still “no bottom in sight” when it came to the price decline: “The crisis on the German real estate market continues.”
The IfW also adjusted the price development for the high inflation and thus, for Frankfurt, for example, came to an inflation-adjusted price decline for condominiums of 25 percent over the year. After the period of low interest rates, the Bundesbank spoke of exaggerations in prices on the German real estate market of the order of 25 to 40 percent.
House prices are rising in Dortmund, but not in Düsseldorf
The Association of German Pfandbrief Banks (VDP) also reported house prices continuing to fall in the third quarter, for all property classes. “The price correction is still taking place in all asset classes, a market revival is still a long time coming,” said VDP Managing Director Jens Tolckmitt.
However, he said that the prospects for residential real estate are better than for commercial real estate: “The residential real estate market is about to get into calmer waters.”
Meanwhile, on Thursday the credit broker Dr. Klein, who like Europace belongs to Hypoport, said there are differences from city to city in North Rhine-Westphalia.
The prices for condominiums and houses in Cologne and Düsseldorf continued to fall in the third quarter compared to the same quarter of the previous year and the previous quarter. In Dortmund, on the other hand, prices for single- and two-family houses have at least risen slightly compared to the previous quarter.
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