Real estate sales fall for the first time since the 2009 financial crisis

Hamburg (dpa) – According to a study, real estate sales in Germany are likely to fall this year for the first time since the global financial and economic crisis of 2009. After a record year in 2021, the conditions on the market have turned, according to a new analysis by the Hamburg Gewos Institute for Urban, Regional and Housing Research.

Accordingly, sales of apartments, houses, commercial real estate and land should fall by seven percent this year to 313.5 billion euros and the number of purchases will fall to below 900,000. Based on the data for the first half of the year, a decline in money turnover on the German real estate market is expected in 2022 for the first time since 2009.

Is this the turnaround?

Since May, the number of purchases, sales and, in particular, large transactions have been falling compared to the same period last year, says Sebastian Wunsch, head of property analysis at Gewos. Buying real estate is becoming increasingly difficult for owner-occupiers because financing costs are rising and high inflation is reducing purchasing power. Investors, in turn, waited out of uncertainty. For the study, Gewos analyzed data on land purchase contracts concluded with the expert committees and the associated sales.

According to Gewos, the market for residential real estate, which accounts for almost 80 percent of transactions in Germany, is likely to get off a little lighter this year. Sales of apartments and houses will probably fall by 5.6 percent to almost 240 billion euros.

However, Gewos does not believe in a drop in prices. The pressure on the German housing market remains high due to strong immigration and new construction is halting due to high construction and credit costs. “A comprehensive drop in prices, let alone a sudden drop in prices” is not to be seen. Gewos expects the price increases for residential real estate to slow down to less than three percent. “Regionally and in certain locations and sub-markets – for example in the case of unrenovated existing properties – price declines cannot be ruled out.”

record value in the previous year

Last year, according to Gewos, sales of real estate rose to a record 337 billion euros – an increase of 14.5 percent over the previous year and more than twice as much as ten years ago. While the number of purchases fell slightly due to a lack of supply, the prices for homes and condominiums shot up by around 13 percent. That was the strongest growth since records began in the 1980s. Wunsch spoke of an “absolutely exceptional year” and referred to catch-up effects after the Corona crisis year 2020 and large transactions in the cities.

© dpa-infocom, dpa:220922-99-853926/2

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