Real estate financing: High interest in buying, but great financial worries

Real estate financing: High interest in buying, but great financial worries

According to a report by www.faz.net,
Not so long ago, the environment for buying your own apartment or home seemed almost perfect - apart from property prices that have risen significantly in some cases due to years of low interest rates and personal living conditions. But higher interest rates for real estate loans, together with inflation that has now fallen somewhat and high energy costs, are causing many people great concern.

In order to still be able to fulfill the dream of having their own four walls, more than 90 percent of those surveyed would limit private consumption. 75 percent would prefer to use more equity so that the loan amount remains lower. Around two thirds say that it is not possible for them to finance real estate without an inheritance or gift.

60 percent of those surveyed would forgo expensive clothing and shoes, and the same number would forgo buying an expensive car. Around half of all those surveyed see potential for savings in avoiding expensive furnishings, beauty and wellness products, as well as activities or restaurant visits.

The general conditions in the real estate industry have changed significantly in the past two years, says Rebecca Scheidler, Managing Director of Engel & Völkers Finance Germany GmbH. The interest rates on real estate loans have quadrupled. The costs for existing properties remain at a fairly high level and new construction has come to a standstill in many places. In addition to real estate prices and building interest, the high additional purchase costs, such as real estate transfer tax and long approval processes, also cause reluctance to finance real estate.

It is expected that demand for real estate in Germany could decline due to increased real estate prices, higher interest rates and general economic uncertainty. This could lead to an excess of supply and ultimately a drop in prices in the real estate market. Companies in the real estate industry may need to prepare for lower sales and develop alternative strategies to respond to changing market conditions.