Germany’s decade-long boom in home prices, which ended last year after the European Central Bank decided to introduce a series of interest rate hikes, has sent mortgage rates doubling and sometimes even tripling.
According to Gewos, The Institute for Urban, Regional and Housing Research, the growth phase of the German property market, which lasted more than 10 years in a row, may be coming to an end.
According to a recent study by real estate agency Jones Lang LaSalle (JLL), there is currently a growing trend that has never happened in Germany in the past: rental prices are now rising faster than real estate prices.
For more than a decade, the German real estate market was in a dramatic growth phase. However, as per the new report from the Gewos Institute for Urban, Regional and Housing Research, the sales boom may be coming to an end in the observable future.
Mortgage interest rates in Germany have reached their highest levels in the last eleven years. As a result, a significant drop in a number of requests for mortgage loans is currently taking place.
As recent study of the German real estate market shows, almost all major cities recently began to experience property price decline after years of prices rising.
As of today, Germany has the lowest level of property ownership in the EU. According to the official government data, only 42.1% of families own housing units they live in directly, while the remaining 57.9% of families live in rented houses and apartments.
Despite the economic crisis caused by the COVID-19 pandemic, the German real estate market continues to show steady growth – both the primary and secondary market.
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