Capital, G+J business media
Berlin (ots)
Real estate prices are falling noticeably in many places, and many property developers are abandoning new construction projects. The reason for this is the enormous rise in interest rates and construction costs. They have caused demand to collapse among buyers.
IW real estate expert Voigtländer: “There are no extreme price reductions in the metropolises, but even in large cities it is possible to get a property 5 to 10 percent cheaper.” / Price, rent and yield overview for 40 German cities / Housing market analysis for property owners on capital.de
The signs on the German real estate market have turned rapidly: the boom on the German housing market is over, prices are falling noticeably for the first time. “There are no extreme price reductions in the metropolises, but even in large cities it is possible to get a property 5 to 10 percent cheaper“, says IW real estate expert Michael Voigtländer. The reason for this is the sharp rise in mortgage interest rates and the further increase in construction costs as a result of the Ukraine war. Both have made houses and apartments even more unaffordable for those willing to buy in the past 12 months. Even high earners can only afford a fraction of the apartments advertised. The demand for properties to buy has meanwhile plummeted.
Meanwhile, the supply has increased: Realtors are registering a significant increase in advertisements. In addition, investors have withdrawn almost entirely from the market. This is currently making the real estate sector a “buyer’s market”: “You don’t have to be so quick anymore, so you don’t feel as driven as a buyer anymore,” says IW economist Michael Voigtländer.
But comparison is more important than ever, because the market prices fan out noticeably: New construction remains expensive and is even increasing in price. Especially since many property developers have canceled new projects. Best city locations also remain popular with buyers and continue to fetch top prices. On the other hand, existing buildings in need of modernization are offered at lower prices. With them, however, a high level of renovation work is to be expected, especially in view of the more stringent energy requirements at federal and EU level.
The price level has also fallen significantly in B cities, while smaller cities have remained more or less stable. However, one should not derive a trend towards small towns from this, because the influx into the big cities is continuing. Economist Voigtländer estimates that if interest rates continue to rise, prices could fall by another 10 percent over the course of the year. However, an end to the weak phase is foreseeable. Because apartments remain in short supply, especially in metropolitan areas.
The CAPITAL real estate compass 2023 measures the price increase after the interest rate hike by the central banks. Together with the iib Institute, the business magazine CAPITAL analyzes the market development in the 40 most important cities in the country for its May issue, as well as details the house and apartment prices including rent levels in ten German metropolises. The required purchase and rental prices on all relevant online real estate portals and the offers from project developers at the end of the year serve as a basis. The real estate compass also contains price forecasts for the next twelve months. In addition, CAPITAL, together with the iib Institute, is once again offering the opportunity to have one’s own property evaluated using a detailed housing market analysis. Property owners can get the analysis for free on the internet at www.capital.de/wohnmarktanalyse create.
Press contact:
Editorial team CAPITAL
Nadine Oberhuber
E-Mail: [email protected]
www.capital.de
Original content from: Capital, G+J Wirtschaftsmedien, transmitted by news aktuell
