Real estate market: Deutsche Bank expects the real estate boom to end in 2024

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Single-family houses in Lower Saxony: Demand is still growing faster than supply.

Photo: Hauke-Christian Dittrich / dpa

The German real estate market has been booming for years - but for how much longer?

Deutsche Bank expects the boom to continue somewhat in view of low interest rates, a lack of housing and undervaluation in some regions.

But calculations suggest that the nationwide price surge will come to an end this decade, the analysts of the financial institution write in a study - and probably in 2024.

According to the study, the fundamental real estate shortage will decrease in the coming years.

The lower immigration in the corona pandemic also contributes to this.

Any remaining undervaluation on the market would disappear if prices continued to rise.

"This increases the risk that interest rate increases will trigger a sell-off," warned the experts.

But even without an interest rate shock, residential properties in Germany would lose their attractiveness, at least compared to other residential property markets.

But anyone who hopes to find a bargain when buying a house in just a few years may be disappointed: the analysts do not expect any major discounts.

The end of the cycle will actually be in 2024, but due to historical comparative data, falling house prices can be expected for a short time.

"Cumulative over three years could hit a minus of five percent".

Economists also speak of cycles in the real estate market that usually follow the ups and downs of the economy.

The Deutsche Bank experts expect particularly long real estate cycles for Berlin and Leipzig.

They see the capital on the way to becoming a global metropolis, while they expect a particularly strong influx of people in Leipzig due to the dying out of villages and districts in the region.

In Bremen and Hamburg, on the other hand, the real estate cycle could end before 2024, as the shortage of housing there dwindles earlier.

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