German Real Estate Market Sees 5.4% Decline in 2024, Marking Fourth Consecutive Year of Decline
The German real estate market has recorded a 5.4% decline in 2024, extending a downward trend for the fourth consecutive year. According to an analysis by the Association of German Banks (VDP), this situation is attributed to persistent economic challenges weighing on the sector. However, a slight increase of 0.5% was observed in the last quarter of 2023, indicating a slight recovery after several quarters of decline.
This prolonged crisis is primarily explained by the rise in interest rates and the increase in construction-related expenses, which have complicated access to bank loans. These factors have led to several bankruptcies among real estate developers and have caused a marked slowdown in transactions. Germany is among the European nations most affected by this situation, alongside China and the United States, where similar disruptions are also impacting real estate markets.
Despite the emergence of stabilization signals, prospects remain uncertain. The recent decrease in interest rates by the European Central Bank could offer some relief to the sector, but experts remain cautious.
