German residential property prices rise 1.9% in Q4 2024 year-on-year

Residential property prices in Germany increased by 1.9% in the fourth quarter of 2024 compared to the same period in the previous year, according to the latest data released by the Federal Statistical Office (Destatis). The modest rise signals a stabilisation of the housing market after months of price corrections driven by higher interest rates and cautious consumer sentiment.

The year-on-year increase marks a shift in market dynamics, following several quarters of stagnation or mild decline. While inflation and interest rate hikes had put downward pressure on prices throughout 2023, the latest data suggests a return of confidence among buyers and investors—particularly in urban areas and regions with sustained housing demand.

On a quarter-on-quarter basis, prices also showed slight upward momentum, driven by renewed activity in both the new-build and existing property segments. Analysts attribute the turnaround to improving economic sentiment, stable employment levels, and the gradual easing of financing conditions, which have made mortgages more accessible.

The data indicates that demand has been particularly strong in metropolitan areas such as Berlin, Munich, and Hamburg, where population growth continues to outpace housing supply. However, price growth in rural regions and smaller cities remains more subdued, reflecting a continued divergence within the German housing market.

Experts also point to an increase in residential investment and a growing interest in energy-efficient buildings, as both developers and buyers respond to stricter EU sustainability regulations and rising utility costs. The trend is expected to influence future pricing and demand patterns across the country.

While the 1.9% annual rise is modest compared to pre-pandemic highs, it is seen as a positive sign of resilience in Germany’s residential real estate sector. The coming quarters will reveal whether the market is entering a sustained recovery phase or simply experiencing a temporary rebound after a period of correction.