German housing market put to the test again
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https://think.ing.com/articles/germany-housing-market-put-to-test-again/
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4 itemsThe German housing market's weakness is showing up everywhere except in prices
German housing market put to the test again
The German housing market is demonstrating a surprising degree of resilience amid rising interest rates and geopolitical tensions, as outlined in the latest commentary from ING. Despite lingering affordability pressures and weakened lending dynamics, recent data indicates marginal price increases, with house prices rising by 1.4% year-on-year in Q1 2026 after a slight uptick of 0.3% quarter-on-quarter. Per the full note, this stability, seen by some as a silver lining, may mask deeper vulnerabilities that could emerge if economic conditions worsen or if interest rates continue to rise significantly.
The German housing market’s weakness is showing up everywhere except in prices
Per the full note [source], the German housing market is illustrating a peculiar scenario where rising mortgage rates and declining affordability coexist with stubbornly high property prices. Despite a 100 basis point increase in mortgage rates and a resultant 1.5% drop in mortgage loan volumes, house prices in Germany have shown unexpected resilience, with a quarterly increase of 0.3% and a year-on-year rise of 0.6% in Q2 2026. This dynamic underscores a housing market fundamentally constrained by supply shortages that mitigate price corrections, even amidst weakening demand and escalating operational costs for consumers.