Pop the housing bubble in Germany

Constant inflation and constant increases Interest rates The European Central Banks (ECB), which increased the cost of bank loans to companies and families, contribute to the bursting of the bubble living place in Germany.

In the first quarter of this year, compared to the same period in 2022, prices sank 6.8 percent, which represents the largest decline in the entire historical series going back to 2000, according to data published by the Federal Bureau of Statistics (Destatis), and collected by Europa Press.

“It was the biggest drop in residential real estate prices in the same quarter of the previous year since the beginning of the time series,” the German statistics office announced, noting that The decline is “likely” to reflect lower demand as a result of higher financing costs ia inflation consistently high.

In this way, housing prices in Germany have accumulated two consecutive quarters compared to the previous year, after falling by 3.4% in the last quarter of 2022. House prices in the German country have not recorded a year-on-year decline since the fourth quarter of 2010.

According to published data, in the first quarter of 2023, a significant drop in prices was recorded in both cities and rural areas, although prices fell more strongly in cities.

Thus, the biggest drop in prices compared to the same quarter of the previous year was recorded in seven capital cities (Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf), where the prices of family and semi-detached houses fell by 10.4%, and 6.4% less had to be paid for apartments.

On the other hand, compared to the fourth quarter of 2022, house prices recorded a 3.1% decline between January and March 2023, slowing their correction from the 4.9% quarterly decline between October and December last year .