Buying real estate in Germany: Interest is increasing despite falling interest rates

Buying real estate in Germany: Interest is increasing despite falling interest rates

Falling interest rates are increasing interest in buying real estate in Germany, according to a recent study. In four out of eight metropolises, the asking prices are already above the previous year's level. The managing director of ImmoScout24, Gesa Crockford, explained that interest in purchasing real estate has increased significantly compared to the previous year, particularly in major cities by 49 percent. The excess supply in the buying market is decreasing, leading to the assumption that prices will rise in the future. In the first quarter of 2024, the asking prices for existing apartments for sale rose by an average of 0.6 percent compared to the previous quarter to 2,490 euros per square meter, although they are still 2.5 percent below the previous year's value.

Although rental prices are showing weaker price dynamics, there is still high demand pressure. According to the analysis, rental prices are expected to continue to rise because too little is being built. Prices for new rentals of existing apartments rose by an average of 1.7 percent compared to the previous quarter, while new apartments recorded a price increase of 1.6 percent. A two-room apartment with 70 square meters costs on average 599 euros in an existing building and 833 euros in a new building.