Commercial real estate prices in Germany fell in the second quarter, interrupting a tentative recovery that had produced five consecutive quarters of gains.
Data from the VDP banking association showed that prices for offices and retail buildings were 1% lower than a year earlier. That followed a 0.5% annual increase in the first quarter.
The commercial market remains sensitive to inflation expectations and borrowing costs. VDP said renewed geopolitical tension had added to concern about both factors, which directly affect the financing of property deals.
Residential prices moved in the opposite direction, rising 1.9% from a year earlier, although growth slowed from 2.3% in the previous quarter. VDP said commercial property was reacting more sharply than housing to geopolitical and interest-rate developments.