BERLIN, March 22 -- German residential property prices plunged 8.4 percent year on year in 2023, the sharpest decline since the start of data collection in 2000, according to a report released by the Federal Statistical Office (Destatis) Friday.

It also marked the first drop on an annual average basis since 2007. However, lower prices did not lead to more purchases due to high interest rates and construction costs.

Data from the country's real estate association IVD showed a total of 229.5 billion euros (247.9 billion U.S. dollars) were invested in private and commercial real estate in 2023, down 30.3 percent compared to the previous year.

Germany has a particularly low house ownership rate, which was only 49 percent in 2021. In contrast, up to 70 percent of the people in the European Union lived in their own four walls, according to the Eurostat.

IVD President Dirk Wohltorf said in January that young families would be "increasingly interested in buying property again because they don't see any long-term prospects for themselves in a rental property due to rising rents."

Affordable housing seems increasingly scarce and the construction industry is suffering from a decline in orders, especially with Germany's economy shrinking by 0.3 percent last year.

To cope with the housing crisis, the government decided on Friday to implement a 3.2-billion-euro growth package, which includes tax relief for residential construction.

According to the plan, 5 percent of the investment costs for new buildings can be written off in a six-year duration. "This is a really big boost for housing construction in Germany," said Federal Construction Minister Klara Geywitz. (1 euro = 1.08 U.S. dollar)

  - Xinhua