Billboard in a new development area in Leipzig: Potential buyers are more cautious
Photo: Jan Woitas / dpa
The dramatic increase in the costs of mortgage lending is having an effect: the steep rise in prices for residential real estate slowed down significantly in the third quarter from July to September.
House prices climbed by 4.9 percent compared to the same quarter last year, as reported by the Federal Statistical Office in Wiesbaden.
This means that the price increase has almost halved compared to the second quarter - from April to June prices had climbed by 9.7 percent.
According to the statisticians, the prices for residential real estate rose more slowly in the third quarter than at any time in seven years.
A lower rate of change compared to the same quarter of the previous year, at 4.4 percent, was last seen in the third quarter of 2015, it said.
Compared to the previous quarter, residential real estate was even cheaper by 0.4 percent.
In rural areas, prices went up more sharply
The largest increases were in the sparsely populated rural districts: Here the prices for one- and two-family houses increased by 7.8 percent compared to the same period last year, and for condominiums by 7.4 percent.
In the seven largest cities of Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf, prices for single and two-family houses rose by an average of 6.2 percent.
In the case of condominiums, the increase was 5.0 percent.
The price increase for one- and two-family houses was weakest in the urban districts: Here there was an increase of 1.8 percent, for apartments 4.5 percent.
What will happen to interest rates in 2023?
According to a study by the German Institute for Economic Research (DIW), the risk of severe price corrections is currently increasing.
“We are not about to see a huge property price bubble bursting in Germany,” said DIW study author Konstantin Kholodilin recently.
"But price slumps of up to ten percent for condominiums and homes are quite possible." The experts classify the fact that purchase prices and rents are clearly diverging as worrying.
The rise in interest rates on loans, but also the significant rise in inflation and high building prices are having a negative impact on the demand for real estate after years of boom.
Experts do not expect a quick trend reversal in interest rates.
The major central banks have announced that they will continue to raise key interest rates in the fight against inflation.
After all: According to financial advisors, falling building interest rates are possible in the coming months.
"In 2023, construction interest rates will in all likelihood not rise as much as in 2022," said Mirjam Mohr, board member for private customers at the credit broker Interhyp.
You expect moderate increases.
"The interest rates remain under pressure," said Michael Neumann, head of the credit broker Dr.
There is no telling when inflation will drop significantly and permanently.
"If expectations remain high well into next year - and I'm currently assuming that will be the case - the ECB will have to further tighten monetary policy in the first few months of 2023."
This year, construction interest has increased from just under one percent to around 3.5 percent for ten-year loans.
The 4 percent mark was briefly reached in autumn.
The reason for the upward pressure was the rising interest rates.
In anticipation of a tighter monetary policy, the yields on federal bonds, on which building interest rates are based, shot up.