German property price growth slows, research institute says

The rise in German flat and single-family home prices slowed further in the second quarter, according to an analysis by the Kiel Institute for the World Economy (IfW).

Purchase prices for flats increased by 0.3% from the previous quarter, while prices for single-family homes rose by 1.8%, the institute said on Thursday.

Official second-quarter figures from Germany's Federal Statistical Office are not yet available.

Among the country's eight most populous cities, flat prices rose most strongly in the western city of Düsseldorf, gaining 1.2%. The sharpest decline was recorded in Stuttgart, where prices fell by 1.6%. The struggling automotive industry is a major employer in the city.

However, the institute did not yet have figures for Berlin, Hamburg or Munich.

"Prices are still rising in nominal terms, but the momentum has clearly weakened," said Jonas Zdrzalek, head of the institute's Greix property price project.

After adjusting for inflation, flat prices fell by 0.9% compared with the previous quarter.

The Greix index is based on property transaction data from expert valuation committees and covers more than 20 major cities and three rural districts.

The Cologne-based German Economic Institute (IW) said in April that the war with Iran was weighing on property prices by driving up interest rates.

Higher borrowing costs were making homes less affordable, weakening demand and limiting the scope for further price increases, it said.