Slowly but surely, asset price inflation is returning in Germany. Declining consumer price inflation and falling interest rates have made this possible.

The slump in asset prices in Germany that has been observed for around two years has come to a standstill. This is due to developments on the interest rate markets.

Asset price inflation in Germany was -1.3% at the end of the first quarter of 2024. While prices fell in the middle of last year in the wake of interest rate hikes, they stabilized in the first quarter of 2024 due to possible interest rate cuts.

The turnaround in interest rates led to falling asset prices in the northern countries of the eurozone in mid-2023. In the southern countries, a catch-up effect led to asset prices rising despite rising interest rates.

Asset price deflation has continued for six quarters in a row now. Most recently, asset prices for private German households fell by -2.9%. This is primarily due to the development of market and key interest rates.

The turnaround in interest rates led to falling asset prices in the northern countries of the eurozone in mid-2023. In the southern countries, a catch-up effect led to asset prices rising despite rising interest rates.