WIESBADEN (dpa-AFX) - The subdued demand for real estate is having an impact on prices for apartments and houses in Germany. The price increase weakened significantly in the third quarter within a year. Compared to the previous quarter, residential real estate was even 0.4 percent cheaper, as reported by the Federal Statistical Office in Wiesbaden on Thursday.

Residential real estate cost in the period from July to September on average 4.9 percent more than in the same quarter last year. According to the data, a smaller increase was last recorded in the third quarter of 2015 with 4.4 percent. In the second quarter of the current year, single-family and two-family houses and condominiums had increased in price by 9.7 percent within a year, according to the latest data.

The largest price increases in the third quarter were in sparsely populated rural counties. One- and two-family houses increased in price there by 7.8 percent, condominiums cost 7.4 percent more than a year earlier. In the top metropolitan areas of Berlin, Hamburg, Munich, Cologne, Frankfurt, Stuttgart and Düsseldorf, prices for detached and semi-detached houses rose by 6.2 percent and for owner-occupied apartments by 5.0 percent.

The weakest increase, at 1.8 percent, was for single- and two-family houses in urban districts. Apartments there cost 4.5 percent more than in the year-earlier quarter.

The rise in interest rates on loans, but also the significant increase in inflation and high construction prices are weighing on demand for real estate after years of boom. The German Institute for Economic Research (DIW) believes that residential property prices may fall by up to ten percent in the coming year. DZ Bank expects a drop of up to six percent in 2023./mar/DP/mis