House prices in Germany were almost unchanged in the third quarter as higher interest rates continued to curb demand for properties. The data is from the German Economic Institute (IW), cited by “Reuters“.
Apartments rose by 0.3% compared to the same period last year, while the prices of single-family and two-family houses increased by 0.4%. Thus, the market remains close to the price stagnation levels observed in recent years.
“Prices have been moving mainly sideways since 2023 and are 10% below their peak in 2022“, the IW said. The institute links the weak dynamics to the increase in the cost of financing, which limits the ability of households to buy homes.
Mortgage loans are getting more expensive
The pressure on buyers is being intensified by the rise in mortgage rates. According to data from the German credit intermediary Interhyp, the average interest rate on 10-year housing loans reached around 4.4% in October. This is the highest level since the financial crisis in 2009, German public television ARD reported.
In May, the average interest rate was around 3.9%, and in March - approximately 3.6%. Higher borrowing costs increase monthly payments and reduce the amount that buyers can afford to borrow.
“Due to higher financing costs, the demand for properties for sale has decreased, which is why prices have essentially remained unchanged“, the German Economic Institute said.
Official data to be released in December
The final picture of the housing market in the third quarter will be presented by the German statistical office on December 23. Previous official data showed a slight increase in prices in the second quarter of 2026.
The discrepancy between the weak price growth and the more tangible increase in the cost of loans shows that high interest rates are currently mainly affecting market activity and the affordability of purchases. IW data does not show a new strong decline, but also does not give reason to talk about a recovery of prices to 2022 levels.
Detailed statistics on average property prices in Bulgaria by city and neighborhood can be seen at imot.bg