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House prices continue to fall in Germany.

Ger­man house prices suffered their biggest six-month fall for over 20 years in the second half of 2022,

Apartment

under­lin­ing how an unpre­ced­en­ted rise in interest rates has brought an abrupt end to the dec­ade-long boom in Europe’s biggest prop­erty mar­ket.

The Asso­ci­ation of Pfand­brief Banks, which col­lects data from 700 credit insti­tu­tions, said res­id­en­tial prop­erty prices had fallen 1.8 per cent in the fourth quarter, com­pared with the pre­vi­ous quarter. House prices have been sur­ging for the past ten years in much of Europe. In Ger­many, they have risen more than 60 per cent in only seven years. But since the European Cent­ral Bank star­ted rais­ing interest rates last sum­mer to tackle record infla­tion, the region’s prop­erty mar­ket has gone into reverse.

The fourth-quarter fall in Ger­many fol­lowed a 0.8 per cent drop between the second and third quar­ters, which was the first decline in Ger­man house prices recor­ded by the banks since 2010.

The Pfand­brief asso­ci­ation’s data showed a con­tinu­ing decline in non-res­id­en­tial prop­erty in the latest six-month fig­ures, with com­mer­cial real estate prices fall­ing 5 per cent and those for retail­ing prop­er­ties by 8 per cent.

There have been even big­ger falls in the aver­age house prices of other European coun­tries in recent months, although the over­all EU hous­ing mar­ket still grew 0.9 per cent between the second and third quar­ters — the latest data avail­able from the EU stat­ist­ics agency Euro­stat.

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