The final quarter of 2022 saw an abrupt drop in property prices across 13 of Germany’s major cities, a new analysis by property company Immowelt has revealed. Essen, Hanover and Nuremberg saw the biggest reductions.

Property prices drop across German cities

The final quarter of 2022 brought with it a new trend in Germany’s property market, with house prices in 13 of the country’s cities falling by as much as 8 percent and an average of 4,7 percent.

The Immowelt Preiskompass makes a quarterly assessment of house prices in German cities with more than 500.000 inhabitants. The analysis is based on properties registered on the company’s own site, immowelt.de, and assesses listings of existing first-floor properties consisting of 75 square metres and three rooms, that were built during the 1990s.

According to the company, which is based in Bavaria, a sharp rise in construction costs - which is linked to material shortages caused by the Ukraine war - has meant falling demand, as many people cannot afford to buy property at the moment.

The news of the sink comes just after Immowelt published data on the increasing affordability of family housing in Germany, finding that families in half of Germany’s cities must have an income of at least 5.000 euros before tax in order to be able to afford their own flat or house.

Property prices fall considerably in Essen, Hanover and Nuremberg

Among the cities which saw the most considerable drop in property prices were the northern cities of Essen and Hanover, which saw respective drops of 8 and 7 percent. Further south in Bavaria, prices in Nuremberg fell by 6 percent in the final quarter. This amounted to a price decrease of between 2.767 and 3.881 euros per square metre in the three cities.

While these cities are not necessarily considered hotspots, according to Immowelt the reduction can be put down to a previous overvaluing of property in the three locations, which is now returning to a “market-oriented level”.

Hamburg and Munich see 6 percent house price reduction

The same cities that Immowelt named the most unaffordable for families in Germany, Hamburg and Munich, have seen an identical reduction in property prices, both at 6 percent. In the port city, buyers can now expect to pay a not insignificant 6.424 euros per square metre and, in the Bavarian capital, a staggering 8.953 euros.

On the other end, in Berlin and nearby Dresden, house hunters were only graced with a 1 percent decrease in comparison to the previous year.

If you want to know more about final-quarter house prices in 2022 you can read the Immowelt Preiskompass here.

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