Germany's economy is export based. Now almost every country is struggling with post corona effects. Therefore everyone tries to support their local businesses. Germany has the schuldenbremse.
The real estate market was about 40% overvalued and bureaucracy with corona did it's best. Now the market is struggling to keep alive. No seller accepts the lower prices, banks already adapted and demand high securities. More people have to rent, rent rates hike, people struggle with rates and don't consume as much.
As personal experience: My wife and me are struggling to get a home in the range ~500-800k, we got 20% down payment and with income we are in the upper 10% of all dinks in Germany. Still struggling to get a home worth the price and getting credit for.