FRANKFURT (Reuters) – German commercial property prices fell 7.4% in the second quarter of 2024 compared with a year earlier, the VDP banking association said on Monday, as the nation’s property industry suffers its worst crisis in decades.
The values of commercial real estate – in decline for two years – showed a 0.4% rise from the first three months of this year, in a sign of the market “calming down”, VDP said.
“The situation in the commercial property market remains tense,” said VDP’s chief executive Jens Tolckmitt.
For years, property in Europe and particularly Germany boomed as interest rates fell, turbocharging demand. But a sudden jump in interest rates and building costs tipped some developers into insolvency as bank financing dried up and deals froze.
Germany has so far been Europe’s hardest hit in a rout that has also struck China and the United States.
(Reporting by Tom Sims, Editing by Rachel More)