Real estate prices in Germany: analysis, development, and tips | Interhype

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How do real estate prices develop in Germany? Jörg Utecht, CEO of the Interhyp Group, answers this question in the current Interhyp-Zerzupdate. After a few months of the decline in price, a slight increase in real estate prices can be observed again in January. However, it remains to be seen whether this is the beginning of a new trend.

When looking closely at the German metropolises, there are regional differences. In Munich, prices have remained stable since November 2023, while they are slightly declining in Frankfurt. On the other hand, Hamburg and Berlin have had an upward trend for the first time since March 2023. Both older properties before 1990 and younger real estate after 2010 have a slight price increase.

The real estate market is currently extremely attractive for those interested in buying. The interest rates have dropped noticeably in the past few weeks, by 0.7 percentage points since the interest peak in November. This leads to lower monthly installments and increasing interest in real estate.

Data from the subsidiary Thinkimmo also show that the average lying time of real estate on the real estate portals in the first half of 2023 has dropped compared to the fourth quarter of 2022. This indicates that the increased interest in real estate affects the length of stay.

experts assume that the construction interest for 10-year loans will move by 3.5 percent in the next four weeks at the same level. In the medium to long term, interest could fall to 3 percent, according to half of the respondents. The other half expects a constant interest rate with fluctuations between 3.5 and 4 percent.

Most experts agree that the first key interest rates by the European Central Bank (ECB) are not to be expected before summer 2024. Carsten Brzeski, chief economist for Germany and Austria of the ING, explains that the financial markets expect a quick interest rate reduction in the ECB, but neither statements from ECB members nor the currently high inflation rate indicate this. As soon as it becomes clear that the ECB will reduce the key interest rate in June at the earliest, an increase in capital market interest rates can be expected.

Overall, the German real estate market is currently in a positive development. The falling interest makes the purchase of real estate attractive and lead to an increase in interest. Those interested in buying shouldn't wait too long because the prices could also rise again in the coming months.

Interhyp is a leading address for private construction finance in Germany. In 2022, the company successfully placed a financing volume of EUR 29.0 billion with over 500 financing partners. With the multi -award -winning competence of your financing specialists and your own building finance platform Home, Interhyp offers tailor -made solutions for your customers.

The current real estate prices in selected German metropolises are listed in the following table:

| City | Price increase since November 2023 |
| ———- | —————————- |
| Munich | -0.1% |
| Frankfurt | -0.8% |
| Hamburg | +1.6% |
| Berlin | +0.7% |


Source: Interhyp AG/OTS