German home prices halt decline in fourth quarter but outlook uncertain

By Tom Sims and Rene Wagner

FRANKFURT, March 25 (Reuters) - German residential property prices rose in the fourth quarter, halting a decline in place since 2022 by gaining 1.9% year-on-year, federal statistics office data showed on Tuesday.

But the outlook for the sector remains uncertain, with a recent increase in borrowing costs clouding prospects.

Home prices began their decline in 2022 after the European Central Bank began a rapid increase in interest rates to curb rampant inflation, sparking Germany's worst real-estate crisis in decades.

The pace of price declines has slowed over the past year, though the outlook for the broader property sector - especially offices - has been muted.

Home prices rose in all but the most thinly populated areas, the statistics office said.

Prices increased the most in big cities, excluding their metropolitan areas, rising 2.5% for apartments and 2.2% for houses.

The statistics office is revising its data and figures are preliminary, it said.