Real estate market: loss of value stopped, but improvement only limited

Real estate market: loss of value stopped, but improvement only limited

The prices for unrenovated houses with poor energy performance fell significantly last year. According to a study by real estate experts, there are now signs that this downward trend has stopped, with one exception. For older, unrenovated houses, the costs of energy-saving renovation are almost completely deducted from the purchase price. As a result, the price decline has stabilized for the time being.

One reason for this development is the stabilization of construction costs, although there have even been declines in some trades. Financing costs have also stabilized following a previous increase in interest rates. The difference in price levels between apartment buildings with the top energy efficiency class A/A+ and the lower-rated classes G/H was an average of 25.1 percent in the first quarter of this year, compared to 26.9 percent at the end of last year.

Energy efficiency is playing an increasingly important role when buying property, especially with rising prices for electricity and gas. A new federal government law on heating replacement has created additional uncertainty. Owners often have to grant larger discounts, especially when selling single and two-family homes, as buyers usually have to bear the higher energy costs if they want to live in the property themselves.

Despite the slight improvement, sales of unrenovated properties remain challenging, particularly in rural areas. Here, owners are often forced to give up more on the price because potential buyers can hardly offset the costs of energy-saving renovation due to lower rental income. The gap between old and new objects could therefore increase even further in these regions, according to expert Sören Gröbel.