Skip to content

Germany’s housing boom is coming to an end, data hints

Germany's housing boom is coming to an end, data hints
Dino Kurbegovic

Rising interest rates, high inflation, an energy crisis, and a lot of global uncertainty are usually not ingredients for a booming market. The German real estate market seems to be finally catching up to realities as the Housing Index in Germany decreased to 222.97 points in August. 

The German property market has been growing without interruptions since 2009; however, according to a new report by the Hamburg-based Gewos Institute for Urban, Regional, and Housing Research, this period of rapid growth could end. The Institute expects a 7% drop in commercial real estate and land sales this year, making up roughly €315.5 billion ($308.10 billion). 

Meanwhile, Welt’s Holger Zschaepitz proclaimed the German housing boom is over, showing a chart of Germany’s major real estate lender, Hypoport group, shares plummeting 34% after they suspended their full-year forecast. 

“This chart highlights that the housing boom in Germany is over. The real estate lender Hypoport shares plunged as much as 34%, the most ever, after the group suspended its forecast for the full year, saying residential mortgage finance customers are holding back on property purchases.”

Hypoport share price. Source: Twitter 

Post-Covid boom

On the other hand, Gewos believes that prices will not drop since the pressure on German housing remains high due to strong immigration, but new construction will be halted due to rising credit and energy costs.

In 2021, the housing market in Germany saw sales of €337 billion ($328.99 billion), an annual increase of 14.5% and twice as much as ten years ago. This burst in activity in the real estate market followed the Covid lockdowns as people sold apartments to buy homes in more rural areas, but it was also a catch-up play. 

Real estate could be a bad investment in Germany with a possible slowdown and drop, but a lot will depend on the energy market and Central Bank policies going forward. 

Buy stocks now with Interactive Brokers – the most advanced investment platform


Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk. 

Best Crypto Exchange for Intermediate Traders and Investors

  • Invest in cryptocurrencies and 3,000+ other assets including stocks and precious metals.

  • 0% commission on stocks - buy in bulk or just a fraction from as little as $10. Other fees apply. For more information, visit etoro.com/trading/fees.

  • Copy top-performing traders in real time, automatically.

  • eToro USA is registered with FINRA for securities trading.

30+ million Users
Securities trading offered by eToro USA Securities, Inc. (“the BD”), member of FINRA and SIPC. Cryptocurrency offered by eToro USA LLC (“the MSB”) (NMLS: 1769299) and is not FDIC or SIPC insured. Investing involves risk, and content is provided for educational purposes only, does not imply a recommendation, and is not a guarantee of future performance. Finbold.com is not an affiliate and may be compensated if you access certain products or services offered by the MSB and/or the BD

Read Next:

Finance Digest

By subscribing you agree with Finbold T&C’s & Privacy Policy

Related posts

Sign Up

or

By submitting my information, I agree to the Privacy Policy and Terms of Service.

Already have an account? Sign In

Disclaimer: The information on this website is for general informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. This site does not make any financial promotions, and all content is strictly informational. By using this site, you agree to our full disclaimer and terms of use. For more information, please read our complete Global Disclaimer.