German house prices fall for first time in a decade 

German property market has changed since the European Central Bank started to increase interest rates

Germany’s housing boom is over as prices for residential properties dropped for the first time in over a decade.

A measure of home valuations fell in December by 0.8% from the same month a year ago, according to data released by the mortgage technology provider Europace. That’s the first decline in the company’s EPX index for the month since 2009. 

The drop in housing prices highlights how much the situation in the German property market has changed since the European Central Bank started last year to reverse a decade of low and even negative interest rates. 

Meanwhile, economists at Nomura have predicted that British house prices look to be on track to fall around 15% by mid-2024, a more severe drop than other forecasters have projected. Last month, UK housing prices slid the most since the 2008 global financial crisis.

The market is already showing signs of a reversal, after the Covid-19 pandemic and tax breaks spurred a 29% surge in house prices on the official measure. 

Britain's second-biggest homebuilder Persimmon said it was offering new customers a "10 months mortgage-free" deal as it tries to revive demand for its homes in an industry grappling with an economic downturn.

The mortgage offer has garnered an increase in website enquiries in its first week, Persimmon said, but added that it was too early to predict when there will be a recovery in demand. 

Bloomberg and Reuters