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The price recovery for residential properties lost momentum at the end of 2024. Prices for apartments stagnated, while single-family homes and multi-family houses are slightly more expensive than in the previous quarter (Q3 2024). Market activity is picking up, as evidenced by an increasing number of transactions. These insights are based on the latest update of the German Real Estate Index (GREIX), a joint project of the local expert committees (Gutachterausschüsse für Grundstückswerte (GAAs)), ECONtribute, and the Kiel Institute. The transaction databases of the GAAs, which contain notarized sales prices, are evaluated according to the latest scientific standards. (...)
(...) All data for currently 20 cities and regions including their neighborhoods are freely available at https://www.greix.de/.
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”After the historic drop in prices in 2023, prices are moving sideways in the fourth quarter of 2024,” says Jonas Zdrzalek, real estate expert at the Kiel Institute. ”One reason could be the ongoing high financing interest rates.”
The price upswing that began in the second quarter of 2024 slowed down recently, particularly for apartments. Compared to the third quarter of 2024, apartment prices fell slightly by 0.1% in Q4 2024.
Prices for single-family homes rose by 1.8%, continuing the moderate price upswing of the previous quarter. Prices for multi-family homes rose by 5.4% in the fourth quarter of 2024. However, there is a high degree of volatility in this segment due to the low number of transactions, and thus the informational value is limited.
Compared to Q4 2023, sales prices for apartments and single-family homes increased in Q4 2024. At the end of 2024, however, it is clear how much the downturn from the crisis years of 2022 and 2023 continues to have an impact. Prices for apartments in the fourth quarter of 2024 are still 13% below their respective peak in 2022—adjusted for inflation, i.e. measured in current purchasing power, the decline is even 21 percent. Single-family homes also cost 13 percent less than at their peak (down 23 percent when adjusted for inflation). The decline was even more drastic for multi-family homes: sales prices here are 25 percent below their peak, or even 33 percent when adjusted for inflation.
Significantly more transactions than in the crisis year 2023
Following a sharp decline in transactions in 2023, the number of transactions increased again in 2024. Compared to the previous year, 26% more apartments, 23% more single-family homes, and 24% more multi-family homes were sold.
Despite these developments, market activity on the real estate market is still far below the historical peak. In 2024, almost a third (-32%) fewer apartments were traded, a quarter (-25%) fewer single-family homes, and a fifth (-20%) fewer multi-family homes than in the record year of 2021.
“Liquidity on the real estate market is slowly increasing again, which could indicate that the uncertainty among market participants is easing,” says real estate expert Jonas Zdrzalek, ”but there is still no sign of the next boom.”
Different dynamics in major German cities
Apartment prices are developing differently across Germany. This is shown by a look at the last quarter of 2024 in major German cities (Berlin, Dresden, Frankfurt/Main, Hamburg, Leipzig, Munich, Stuttgart). In Dresden, prices rose sharply by 4.4 percent compared to the previous quarter—while on the other hand the city has the lowest average price per square meter among major German cities at EUR 3,400. In Frankfurt (with an average price per square meter of EUR 5,900), there was a moderate price decline of 1.6 percent compared to the previous quarter. Munich has the highest price per square meter in the GREIX at EUR 8,600 (as of Q3 2024).
Other cities recorded only minimal movements in real estate prices: Leipzig (+0.6 percent) and Stuttgart (+0.2 percent) saw slight increases, while Hamburg (-0.2 percent) and Berlin (-0.3 percent) saw slight decreases.
Outside the major cities, this mixed picture continues. In most of the cities included in GREIX, prices remained stable with minimal fluctuations. By contrast, prices for apartments in Wiesbaden, for example, fell by 2.5 percent, while prices in Karlsruhe fell by 1.9 percent. Potsdam, on the other hand, reported a price increase of 0.8%.
Note: No data for the fourth quarter of 2024 is available for Munich in this GREIX update.
Read full report now (version with preliminary layout): GREIX Q4 2024 (https://www.ifw-kiel.de/publications/greix-q4-2024-price-upswing-slows-down-incr...)
Methodological note
The price development of the GREIX is calculated as an index. This is the only way to use statistical methods (hedonic method) to eliminate distortions that would otherwise occur with average prices per square meter. For example, the sale of a particularly large number of high-priced properties, for example due to a high number of square meters, good location, or good condition, leads to rising average prices per square meter, but such an increase is not based on a general increase in the value of properties. The formation of the index means that there is no upward or downward distortion in the price trend due to specific characteristics of the properties sold.
About the GREIX:
• What is the GREIX?
The GREIX is a real estate price index for Germany based on the sales price collection of the local expert committees, which contains notarized sales prices. It tracks the price development of individual cities and neighborhoods back to 1960 and is based on more than two million transaction data. The dataset can be used to analyze long-term trends in the real estate markets and to place current developments in a historical context.
• What data and methods are used to create the indices?
The data collection and evaluation take place in cooperation with the local expert committees. All real estate transactions are recorded in full. The price development is calculated according to the latest scientific standards and statistical methods (hedonic regression method). The GREIX thus stands for the highest scientific data quality.
• Who finances the GREIX?
GREIX is financed by public funding and is a project of the Bonn-Cologne Cluster of Excellence ECONtribute, which is funded by the DFG, and the Kiel Institute for the World Economy, in cooperation with the local expert committees. Its aim is to increase price transparency in the real estate market. Different price indices for 20 cities and regions are freely accessible at www.greix.de. Additional cities will gradually be added to the data set.
Media Contact:
Elisabeth Radke
Head of Outreach
T +49 431 8814-598
elisabeth.radke@ifw-kiel.de
Kiel Institute for the World Economy
Kiellinie 66 | 24105 Kiel | Germany
Chausseestraße 111 | 10115 Berlin | Germany
T +49 431 8814-1
E info@ifw-kiel.de
www.ifw-kiel.de
Jonas Zdrzalek
Kiel Institute Researcher
+49 160 98272770
jonas.zdrzalek@ifw-kiel.de
Steffen Zetzmann
Kiel Institute Researcher
steffen.zetzmann@ifw-kiel.de
Price Development Market Segments (chart)
Price Development Market Segments (table)
Number of Transactions Market Segments (chart)
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