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German home prices to fall by 3.5% in 2023 due cost of living crisis
Posted on November 28, 2022 |
- In 2023, German house prices will fall by 3.5% as the cost of living crisis and rising borrowing costs strike consumers, but the chances of an outright crash are low.
- Harmonized consumer price inflation in the German economy was 11.6% last month and the European Central Bank has been raising interest rates just, putting intense strain on household budgets.
- The residential market is expected to see a drop 0f 10% due to weakening demand for housing loans and the declining purchasing power of consumers.
- In 2022, the prices for owner-occupied homes and flats in 97 cities across the country grew by 11%, while rents have only increased by 4%.
- In many places, high property prices are due to high demand and low supply and the population is growing in major German cities while few new homes are being built due to unfavorable financing conditions, elevated construction costs, and shortages of workers.