FRANKFURT, Aug 12 Reuters German commercial property prices fell 7.4 in the second quarter from a year earlier but showed signs of stabilisation, the VDP banking association said on Monday, as the country39;s real estate sector grapples with its worst crisis in decades.

Commercial real estate valuations, in decline for two years, rose 0.4 from the first three months of this year, suggesting that the market was calming down, VDP said.

However, prices are likely to move sideways in the coming quarters, and further setbacks are possible given a weak economy and the low volume of transactions in the sector.

The situation in the commercial property market remains tense, VDP39;s Chief Executive Jens Tolckmitt said.

For years, property in Europe and particularly Germany boomed as interest rates fell, spurring demand. But a sudden jump in interest rates and building costs tipped some developers into insolvency as bank financing dried up and deals froze.

Germany has so far been Europe39;s hardest hit in a real estaterelated rout that has also struck China and the United States.

Later this year, German Chancellor Olaf Scholz is launching a fresh bid to tackle the crisis at a meeting of politicians, ministries and industry representatives.

In recent weeks, two of Germany39;s largest landlords, Vonovia and LEG Immobilien, reported losses after revaluing their holdings.

Deutsche Bank, Germany39;s largest lender, last month said the sector remains under pressure.

German…