Germany's Housing Market Is Facing a Serious Downturn in Prices, Analysts Say

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The German housing market has been remarkably strong for decades, but it faces a serious fall in prices over the next couple of years, according to some analysts.

"We already saw the steepest price declines if you look month-over-month — this was in June and July … In August, September and October the price declines are already below 1% … So there is some positive momentum here if you look from an investor's perspective."

And while the language used may vary, many analysts are forecasting a dip in Germany's housing market. The definition doesn't suit the German property market as a whole though, UBS Real Estate Strategist Thomas Veraguth told CNBC. "On balance, house prices are still rising, albeit at a slower pace," Buch said."That said, there are no signs of a severe slump in real estate prices or of overvaluations receding."

"It's likely we will have to revise up our price forecasts for Germany for this year," Sylvain Broyer, EMEA chief economist at S&P Global Ratings, told CNBC.Broyer also said it will take time for a change in financial conditions and fiscal tightening to trickle down and affect the housing demand.

 

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