There is a threat of falling prices on the real estate market

Frankfurt The boom in the residential real estate market in Germany is threatening to come to an end. That could even lead to price reductions, as real estate professionals fear, according to a recent survey conducted by the Cologne Institute for Economic Research (IW) in cooperation with the ZIA industry association and available exclusively to the Handelsblatt.

“Real estate prices only went up for 12 years, and we just kept speculating that things could go down,” commented IW expert Ralph Henger on the results of the survey. Now the time has actually come. “According to all indications, slightly falling prices are to be expected,” says Henger.

The reason for the bad mood: primarily the increased financing costs for real estate. A turnaround in interest rates on the financial markets had already set in last summer and has accelerated in recent weeks. Most recently, the construction interest for loans with a ten-year term was almost three percent – at the beginning of the year it was still around one percent.