Falling property prices are not always good news for potential buyers. Many sellers are stuck with their existing properties – the supply shrinks. This phase could now be over.
The almost two-year decline in property prices in Germany has stopped, at least for the time being: According to data from the Association of German Pfandbrief Banks (vdp), both residential and commercial properties were a little more expensive in the second quarter than in the first three months of this year. The vdp property price index rose by half a percent to 175.5 points, the association announced in Berlin.
Pfandbrief banks: No turnaround yet
In recent days, Volksbanken and Raiffeisenbanken as well as the Kiel Institute for the World Economy have already announced a turnaround in the real estate market, but the Pfandbrief banks are cautious in this regard. “It is still far too early to announce a turnaround, but the difficult situation is easing,” said CEO Jens Tolckmitt. According to the association, the vdp index is based on transaction data from more than 700 credit institutions.
Uneven development in the seven largest cities
Apartments and houses were half a percent more expensive in the second quarter than in the first, but 2.9 percent cheaper than last year. According to the vdp, the development in the seven largest cities has been mixed so far this year: In Düsseldorf (-0.5 percent), Munich (-0.4) and Stuttgart (-0.2), prices continued to fall slightly from the first to the second quarter, while they rose in Frankfurt am Main (+0.5), Hamburg (+0.6), Cologne (+1.1) and Berlin (+1.2).
Unpleasant for tenants
However, there is still no talk of price declines on the rental market: According to the vdp, new contract rents in multi-family houses were on average 6.1 percent more expensive nationwide in the second quarter than a year earlier, an increase of 1.4 percent compared to the first quarter.
Price expectations: sideways, not upwards
Prices for offices and retail properties fell even more sharply year-on-year, with a decline of 7.4 percent; according to the vdp index, there was a slight increase of 0.4 percent from the first to the second quarter. Tolckmitt does not expect property prices to shoot up again overall, but rather a sideways movement for a few quarters.
Source: Stern
