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Buying a house now? Experts warn of rising prices in 2025!
Real estate experts will analyze price trends and interest rate developments in Germany in 2023. Find out why buying now might make sense.
Buying a house now? Experts warn of rising prices in 2025!
The real estate market in Germany will be under changeable conditions in 2025. While the experts are preparing for building interest rates to stabilize in the second half of 2023, the uncertainty among those willing to buy remains noticeable. This uncertainty results primarily from the development of interest rates and the economic influences, which are characterized by a debt package and tariff tirades. Loud Capital Renowned real estate expert Michael Voigtländer advises not to wait before buying, as prices could potentially rise further. Daniel Ritter from Poll also sees no bad time to buy despite the high interest rates.
The forecast for building interest shows that they could be between 3.6 and 3.7 percent on average over a term of ten years, although no increase of 4 percent is expected. Within this framework, demand for real estate loans increased by 31.9 percent to 24.4 billion euros in the first quarter of 2023. What was particularly noticeable was the increase in loans for multi-family homes at 51 percent. Agent portals such as Immoscout24 also recorded an increase in demand of 14 to 16 percent.
Price development and differences between cities
When it comes to real estate prices, it can be seen that they rose by an average of 3.6 percent nationwide in the first quarter of 2023, and even by around 5 percent in major cities. In terms of rental price development, new contract rents in apartment buildings did not lag behind and rose by a national average of 4.3 percent. These developments are in the context of an IW study initiated by real estate expert Pekka Sagner. This study analyzes price developments in Germany since the interest rate turnaround in 2022.
The cities are divided into four categories: A cities, B cities, C cities and D cities. Class A cities such as Berlin and Munich are considered safe investment destinations, but have lower returns due to high purchase prices.
| Cities | Decrease in purchase prices | Increase in rental costs |
|---|---|---|
| A cities | -10.9% | +11.5% |
| B cities | -7.6% | +10.0% |
| C cities | -8.0% | +9.4% |
| D cities | -7.3% | +9.1% |
A particularly remarkable situation can be seen in Berlin, where purchase prices fell by 6.6 percent, while rental costs rose by 22.2 percent at the same time. This represents the highest increase compared to other cities. The reason for this difference could be the strength of the IT sector in Berlin, which is considered stable, while the industrial sector is suffering from a weak economy.
Conclusions and outlook
In summary, it can be said that the real estate market in Germany is characterized by a high degree of dynamism. High purchase prices in major cities and a declining supply of properties in need of renovation make purchasing challenging. However, better price-performance ratios can be achieved, particularly in surrounding communities. The coming years could play a decisive role for market participants due to the government's requirements for energy-saving renovation and further economic developments immo.info reported.