A comparison of the actual sales prices achieved on the German housing market shows that apartment prices traded 1.5 percent lower in 2024 than in 2023. Single-family homes were 1.6 percent and multi-family homes were 3.0 percent below the respective previous year’s price. Adjusted for inflation and hence measured in current purchasing power, the reduction in prices was somewhat greater and around two percentage points higher.
“The German housing market has left the absolute lows of the downturn behind for the time being, and transaction figures have also picked up again,” says Jonas Zdrzalek, real estate expert at the Kiel Institute. “However, monetary and foreign policy uncertainties slowed down the upswing at the end of last year again to some extent.”
Compared to their highs in 2022, prices for apartments in 2024 were still significantly lower at minus 11.4 percent. Adjusted for inflation, the decline was even 18.2 percent.
Single-family homes did cost 12.9 percent less than at their peak (minus 19.6 percent when adjusted for inflation). The decline was even more drastic for multi-family homes, where sales prices in 2024 were 21.6 percent below the peak (adjusted for inflation, minus 27.6 percent).
Comparison of major cities: regionally positive annual balance sheet
The volatility and uncertainty in Germany’s major cities led to some contrasting annual results. In Frankfurt, prices for apartments rose by 3.9 percent between 2023 and 2024. In Leipzig, property prices rose slightly by 1.5 percent.
There were slight declines in Dresden (minus 0.6 percent) and Berlin (minus 1.8 percent). Prices fell more sharply in Munich (down 2.1 percent) and Stuttgart (down 3.2 percent). The sharpest decline among Germany’s major cities was in Hamburg, where prices fell by 4.9 percent compared to the previous year.
New builds stable in price and close to peak
Newly built properties were traded in significantly greater numbers again last year (transaction increase of 40 per cent). However, they still only account for ten percent of all housing transactions. In the 2010s, new builds accounted for between 20 and almost 30 percent of total sales in the top 7 German cities (Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich, and Stuttgart).
Newly built properties have proven to be much more stable in prices and have hardly lost any value during the crisis. Prices for newly built apartments in the top 7 metropolitan areas are almost at their highest levels in 2024.
In contrast, prices for existing properties continued to fall. Classic old apartments built before 1950 were traded 2.3 percent cheaper than in 2023, while prices for existing apartments built after 1950 fell by 1.8 percent. As a result, these sales prices were now around 13 percent below the highs from 2022.
“Two opposing forces are currently affecting purchase prices on the housing market, and it remains to be seen which will prevail. On the one hand, rising interest rates are putting pressure on prices. On the other hand, there is a severe housing shortage, particularly in cities, and supply is limited, which is driving prices up,” says Zdrzalek.
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 purchase price collections of local expert committees, which contain notarially certified sales prices. It tracks the price development of individual cities and neighborhoods back to 1960 and is based on over two million transactions. With the help of this dataset, long-term trends in real estate markets can be analyzed and current developments can be placed in a historical context.
What Data and Methods are Used to Create the Indices?
The local expert committees collect data on all real estate transactions. The price index is estimated using the latest scientific standards and statistical methods (hedonic regression method).
Who is Funding the GREIX?
The GREIX is funded through public grants and is a project of the DFG-funded Bonn-Cologne Excellence Cluster ECONtribute and the Kiel Institute for the World Economy (IfW Kiel) with the goal of increasing transparency in the real estate market. Various price indexes for 20 cities and regions are freely accessible at www.greix.de
The dataset will be gradually expanded to include more cities.