Frankfurt (Reuters) – German commercial real estate prices dropped by 5.4% in 2024, marking the fourth consecutive annual decline, the association of the VDP banking sector said on Monday, while the country’s real estate sector is struggling to Overcoming your worst crisis for decades.
The drop is less than that of 10.2% recorded in 2023, prices that increased by 0.5% in the fourth quarter, their first increase over three months in the first half of 2022.
For years, real estate in Europe, and particularly in Germany, has experienced considerable boom as interest rates dropped, thus stimulating demand.
However, a sudden increase in interest rates and construction costs led certain promoters to insolvency, because banking funding has grown and transactions were frozen.
The market is gradually improving as the European Central Bank reduces its rates, but the VDP remains cautious about the prospects, given the weakness of the economy.
“A reliable evaluation of the future price evolution is marred by great uncertainty,” said VDP manager Jens Tolckmitt.
Germany is the European country in the hardest affected by the real estate crisis that has also struck China and the United States.
(Tom Sims, Noémie Naudin, edited by Augustin Turpin)
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