German home prices stagnate as interest rates pressure market, IW data show

German home prices showed minimal growth in the third quarter, with apartment prices increasing by 0.3% and single-family homes by 0.4% compared to the previous year, according to data from the German Economic Institute (IW). The institute noted that prices have been largely stagnant since 2023 and are approximately 10% lower than their 2022 peak. Higher interest rates and financing costs have dampened demand for properties, contributing to the stagnation. The IW also predicts a decline in new construction completions due to decreased demand and rising building costs, exacerbating the housing crisis. In contrast, rents have increased significantly nationwide by 4.5% year-on-year in the third quarter.