Weakening real estate market in Dresden

The real estate market in the state capital of Dresden clouded over last year. After prices reached record highs in 2022, the past year was characterized by a low trading volume and falling prices, the city administration announced on Wednesday.

Significantly falling sales

According to the information, around 20 percent fewer properties changed hands last year than in the previous year. This is the lowest number of registered property transfers since 1992, according to which the monetary turnover amounted to just over 1.5 billion euros. Compared to the previous year, this represents a decline of around 800 million euros.

This decline affected all submarkets, with the largest declines being in developed land at around 450 million euros and the submarket of condominiums and part-ownership at around 255 million euros. Accordingly, the number of undeveloped properties recorded was around twelve percent below the previous year's level. The monetary turnover of around 46 million euros was around 48 percent down on the previous year.

Falling prices

According to the figures, land prices also fell significantly last year. Plots for the construction of single-family homes cost an average of 335 euros per square meter, 27 percent less than in the previous year. Prices for single-family homes fell from 5400 euros per square meter of living space to 4630 euros. However, according to the committee, the houses traded in 2023 were on average four years older than in the previous year.

The price of semi-detached houses fell slightly from 4230 euros per square meter to 4180 euros. The average purchase price for a semi-detached house was €505,000.

It was not possible to report an average price for apartment buildings built after 1990 due to the low number of purchases last year.

The real estate market is in crisis across Germany. Higher interest rates on loans have made financing significantly more expensive, and many people can no longer afford to buy an apartment or house. Building materials have also become significantly more expensive. According to data from the Federal Statistical Office, residential properties became 10.2 percent cheaper on average in the third quarter of 2023 compared to the same period last year - the sharpest fall since the time series began in 2000. More recent data is not yet available.