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It
was the fourth consecutive quarter of declines and the biggest
since Germany's statistics office began keeping records in the
year 2000, underscoring the nation's biggest property crisis in
decades.
"Until 2022, there was a speculative price bubble in Germany,
one of the biggest in the last 50 years," said Konstantin
Kholodilin from the macroeconomics department of the German
Institute for Economic Research (DIW).
"Prices have been falling ever since. The bubble has burst."
For years, the property sector in Germany and elsewhere in
Europe boomed as interest rates were low and demand strong.
But a sharp rise in rates and costs has put an end to the run,
tipping developers into insolvency as bank financing dries up
and deals freeze.
The decline for single- and two-family homes in major German
cities was especially pronounced in the third quarter - 12.7%,
while apartment prices fell 9.1%.
Other data on Friday showed that orders for the construction
industry dropped a seasonally adjusted 6.3% in October compared
with the month before.
The German Construction Industry Federation said the home
construction sector was headed for a further reduction in jobs.
Austrian property giant Signa, which has a major presence in
Germany, last month filed for insolvency, the biggest casualty
so far of the region's property crisis.
(Reporting by Tom Sims and Rene Wagner; editing by Miranda
Murray; Toby Chopra and Mark Heinrich)
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