By Helena Smolak
New data released on Friday shows that the real estate market in Germany continues to experience falling prices in the third quarter. This trend has persisted over the past year.
According to the Association of German Pfandbrief Banks (VDP), average residential and commercial property prices in Germany fell by 7.1% compared to the same period last year. The VDP issues bonds called Pfandbriefe, which are backed by mortgages, commercial loans, and public-sector debt.
On a quarter-on-quarter basis, German property prices declined by an average of 1.7%, as reported by the association.
The VDP states that the current real estate price index stands at 179.2 points, reflecting an 8.0% decrease since its peak in the second quarter of 2022.
While the price correction is seen in both residential and commercial real estate, it is more pronounced in the latter. Commercial property prices saw a year-on-year decline of 10.3%, while average residential property prices were 6.3% lower than the previous year, according to the association’s data.
VDP Managing Director Jens Tolckmitt commented, “The price correction still affects all asset classes, and we are yet to see a market recovery.”