In 96 percent of all German regions the cost of buying a house was lower in 2023 than it was in 2022, the Housing Atlas published by Postbank and the Hamburg Institute of Economics has found.
The price of residential property is falling across Germany, the annual Postbank Housing Atlas has found. According to the study, the areas which saw the biggest drop in house prices in 2023 were Germany’s seven biggest cities. Berlin, Hamburg, Munich, Cologne, Frankfurt, Düsseldorf and Leipzig saw an average price decrease of 12,7 percent compared to 2022.
Of all German cities, Mainz and Stuttgart saw the biggest decrease, with a respective -16,2 and -16,0 percent compared to 2022. Property prices also fell in smaller cities and towns across the country. In fact, there were only 16 regions in Germany which did not see a decrease in property prices last year.
According to Postbank recession, a substantial rise in mortgage interest rates, increasing uncertainties and a slight decrease in demand are the reasons behind the drop.
In the study, Property Product Manager at Postbank Manuel Beerman pointed out that, while housing in Germany is getting cheaper, it is still unaffordable for most.
“After several years of particularly stark price rises, local property prices in metropolitan areas are overheating,” said Beerman, “These changes are most tangible in large, popular cities and their surroundings. However, the price of residential property, especially in greater Munich or Hamburg, was still very high in 2023 and is not always intrinsically justified.”
According to an assessment by the property portal Immowelt published in early 2023, a family of three in a German city has to earn a minimum wage of 5.000 euros per month before tax to be able to afford a 90-square-metre house or flat.
Families have to dig even deeper to afford a home large enough for three in the country’s most expensive cities. In Munich, families have to fork out 823.590 euros to buy a 90-square-metre property. Paid out by a family of three with one child, with one adult working full-time hours and the other working part-time, monthly payments of 4.255 euros (according to interest rates in early 2023) would snatch a staggering 88 percent of an average family’s monthly income.
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