Economic researchers forecast rising real estate prices

According to a study by the German Economic Institute (IW Köln), which is closely linked to employers, the downward trend in real estate prices in Germany has come to a halt. In the period from October to December 2023, purchase prices for condominiums rose by 0.8 percent compared to the previous quarter, as the analysis shows. Single and two-family homes recorded a similarly high increase of 0.6 percent. The IW experts, led by Michael Voigtländer, interpret this as a sign of a bottoming-out phase on the market.

The study suggests that the phase of stronger price reductions in the second half of 2023 has come to an end and a turnaround appears to have been achieved. Nevertheless, the price level remains more than eight percent lower compared to the first quarter of 2022 for both condominiums and detached and semi-detached houses. According to the study, properties with a poor energy balance in particular have become more affordable.

Rents continue to climb

The forecast by the German Economic Institute (IW) is that the purchase market will enter a normalization phase against the backdrop of expected further interest rate cuts for property loans in 2024, continued rent increases and positive income trends in private households. It is assumed that transaction figures will rise again, although a sudden return to the very high transaction volumes is not expected by 2021. Rather, everything indicates that the market is on the way to a gradual recovery.