Real estate prices and building interest rates are falling - How you as a buyer can use your room for maneuver

Real estate prices and building interest rates are falling - How you as a buyer can use your room for maneuver

According to a report by www.tagesschau.de,

Property prices and building interest rates are falling, while the number of available properties on the market has risen sharply. This creates a favorable negotiating position for potential buyers in the real estate market. According to the Federal Statistical Office, real estate prices fell by 10.2 percent in the third quarter of 2023 compared to the previous year. Prices fell by 12.7 percent, particularly in the top 7 regions, which include Munich.

Credit broker Interhyp confirms that the real estate offering in Germany has doubled and that there are currently a good 400,000 properties in the portals. Jörg Utecht, CEO of the credit broker, emphasizes that this creates a favorable negotiating position for prospective buyers.

The large-scale price reduction primarily affects properties in efficiency classes B, C, D, G and H, whose prices have fallen by up to 13 percent. At the same time, building interest rates have fallen by almost 0.8 percentage points since the beginning of November 2023, from 4.23 percent to 3.45 percent.

Experts predict that interest rates could fall further as the European Central Bank is expected to make its first downward move in interest rates in early summer. This could lead to building interest rates falling further, thereby opening up a favorable window of opportunity for property buyers.

The construction industry is also badly affected - according to a study by the Ifo Institute, the business climate has fallen to its worst value since the survey began in 1991. The rising interest rates caused by the interest rate turnaround have deterred many construction companies and led to a wave of cancellations.

As a result, cheaper construction costs and increasing competition have become apparent in the construction industry. The outlook is optimistic that the favorable conditions for property buyers will continue and the situation in the construction industry will improve.