Immowelt's latest study exposes the transformative effects of interest rate shifts on Germany's real estate sector. The once-booming market now grapples with declining property prices in 71 out of 75 major cities. Notably, Heidelberg takes the lead with a remarkable 15.8% price drop, while Berlin resiliently navigates a mere 0.5% decrease amid rising interest rates.

Munich, on the other hand, witnesses a substantial 6.7% dip in square meter prices, settling at €8,191. Hamburg and Frankfurt also experience declines of 2.5% and 5.0% respectively, reflecting the profound impact of the interest rate surge.

According to Felix Kusch, CEO of Immowelt, "The higher mortgage rates have distinctly manifested in the market. Property financing challenges have excluded various income brackets from the buying market, significantly complicating the sale of properties and exerting noticeable downward pressure on market prices."

Now the yield shock will be moving into the balance sheets of the credit sector.