Trend change in the property market - where house prices are now falling
For the first time since 2008, the hot property market is showing signs of a trend change. But owning your own home may remain a pipe dream for many.
For years property prices have only moved in one direction: up. A seemingly endless phase of low-interest rates has made real estate financing cheap. Individuals and investors rushed into the market almost greedily, despite the constant rise in prices.
That seems to be over now. At least that is evidenced by current data from property portal Immoscout24. "We are living in turbulent times, which is also noticeable in the real estate market," says its managing director Thomas Schreter. For the first time in many years, a "trend reversal" is evident in the real estate market.
According to the housing barometer portal, price trends are weakening across the board - new construction or existing stock, flat or house. Schreter says: "Providers are now finding it much more difficult to find buyers for their property offers.
One of the reasons for this development is the falling demand for residential properties in the first place. While last year flat listings on the portal were online for an average of 27 days, recently they have been online for 31 days. "The further marketing period is also a clear indication that the housing market is cooling off," says Schreter.
More people want to rent
The reasons for the decline in demand are many. Higher interest rates play a big role. They make it more expensive to finance the property, and savings are worth less due to high inflation.
Accordingly, the Imoscout data shows a change in demand: fewer people want to buy, and more people want to rent. According to the housing barometer, rental providers in Hamburg received an average of 68 inquiries per week, in Berlin 217, and this trend is increasing.
Compared to the second quarter of last year, demand for flats and single-family homes for sale has fallen by 36 percent, while demand for rental flats has increased by 48 percent. It is not surprising, as people want to be more mobile. For example, the popularity of online casinos https://3dpdanmark.dk/casinoluck-bonus/ opposite land-based ones is skyrocketing.
"At first glance, these are impressive figures, but in real demand for properties is still higher than 2019 levels in Corona," Schreter explains. The market has been fuelled by low-interest rates over the past two years and a new equilibrium is now slowly forming.
The supply reflects this development: after the condominium and house market liquefied over the years, 46 percent more properties are now on offer than a year ago. As a result, some properties are even cheaper again. "We're seeing a significant price correction, especially in metropolitan areas," says Schreter, "especially for new condominiums and single-family homes, both existing and new.
New-build prices are falling particularly sharply
In Hamburg, the prices of new flats and houses have fallen by more than five percent, and in all other major cities, new builds are showing a greater decline in prices than existing properties. In Cologne and Düsseldorf, it was around four percent, and in Frankfurt, it was 1.7 percent. In Munich, Stuttgart and Berlin, prices for new flats were almost unchanged.
The different development of new-build and existing stock is probably also due to the fact that new-build apartments are still significantly more expensive and are losing their appeal due to rising interest rates. The price per square meter of a new flat recently averaged EUR 4128, compared to EUR 2809 for existing flats.
According to Schreter, the current development is good news for buyers with a lot of capital: "Lower asking prices and less competition for properties is helping them. They are now finding many more offers and can negotiate the purchase price more easily than before."
Interested parties who want to finance a significant portion of their property are less likely to benefit from the current development. After a few months, the situation changed for her and her dream of owning her own home was shattered. Because a lower purchase price often cannot compensate for higher interest rates. For a typical financing model, payments have in some cases doubled from the low-interest rates of the previous year.
News from the world of gambling: VPN casinos - not just useful for playing abroad