FRANKFURT (Reuters) -Residential property prices in Germany dropped 8.4% in 2023 from a year earlier, data on Friday showed, in a further grim sign for the real-estate sector in Europe's largest economy.

The fall was the biggest since Germany's statistics office began keeping records in the year 2000, underscoring the nation's biggest property crisis in decades. It was also the first annual decline since 2007.

For years, the property sector in Germany and elsewhere in Europe boomed as interest rates were low and demand strong. But a sharp rise in rates and costs has put an end to the run, tipping developers into insolvency as bank financing dries up and deals freeze.

For the fourth quarter, home prices dropped 7.1% from a year earlier. It was the fifth consecutive quarter of declines but not as sharp as the 10.1% drop in the third quarter.