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German Housing Market Shows Signs of Recovery

German residential property and rental prices are rising after a period of decline, but concerns remain about the housing market's future. The VDP and other sources show modest price increases, but they're urging increased housing construction.

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German

Germany

EconomyGermany Real EstateHousingMarket Trends

Association Of German Pfandbrief Banks (Vdp)Deutsche BankCommerzbankKiel Institute For The World EconomyStatistisches Bundesamt

Jens Tolckmitt

What is the source of the data, and how reliable is it?: The data comes from the Association of German Pfandbrief Banks (VDP), which bases its analysis on transactions from over 700 banks and thus is considered more reliable than those based on listing prices. This data aligns with that of the Kiel Institute for the World Economy.
What are the main factors contributing to the price changes?: The increase in prices is attributed to lower construction interest rates and renewed lending by banks. The rise is modest, and setbacks are possible given the weak economy and global uncertainties.
What is the current trend in German residential property prices?: German residential property prices increased for the second consecutive quarter, suggesting an end to the housing crisis following significant price drops last year. However, prices remain slightly below the third quarter 2023 levels.
How are rental prices changing in Germany, particularly in major cities?: New rental contract prices increased by 0.7 percent quarter-over-quarter and 5.6 percent year-over-year. The biggest increases were observed in Berlin and Frankfurt, reflecting a tightening rental market in major cities.
What is the outlook for the German housing market, and what actions are being called for?: The VDP's CEO, Jens Tolckmitt, urges decisive action to stimulate housing construction, warning that the situation is worsening due to a decrease in building permits and low completion rates. He emphasizes the need for immediate measures to address this ongoing issue.

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