German Federal Statistical Office announced that residential real estate prices in the country fell sharply towards the end of last year after a long boom period.

The bureau attributed the quarter-on-quarter decline of 5 % in the fourth quarter to lower demand resulting from higher mortgage costs and inflation. The decline was the steepest since 2007, the bureau said.

<On a year-over-year basis, detached and semi-detached home prices fell 3.6 % in the fourth quarter. The decline can be seen in both urban and rural areas, with house prices falling more sharply than apartment prices. Over the first three quarters of 2022, residential real estate prices rose by 1.5 % over the year, down from a rise of 11.5 % in 2021 as a whole, the steepest rise since 2000, when the current series of figures began.

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The European Central Bank began increasing its interest rate mid-year. This was followed by a 75-bp hike in September, a similar increase in November and a 50-bp hike in December.