Real estate losses in Germany: almost a trillion euros gone

Real estate losses in Germany: almost a trillion euros gone

Germans' real estate assets fell by almost one trillion euros in the twelve months to September 2023, according to a calculation by the consulting firm Barkow Consulting. Although the Bundesbank's official figures show a loss of around 479 billion euros or around 4.5 percent, realistic calculations show a dramatic loss of almost a trillion euros after taking the inflation rate into account.

The impact of these losses varies depending on the individual situation. A homeowner in a strong real estate region like Tegernsee could experience less loss of value compared to someone in a structurally weak area like the Ruhrpott. Despite the book losses, which initially only exist on paper, these have consequences for homeowners, especially with regard to follow-up financing.

Follow-up financing for real estate could be more expensive because the value of the property has fallen and is therefore considered less security for the bank. With the European Central Bank's current high key interest rates, property owners could be confronted with additional costs. It is therefore recommended to compare different offers at an early stage, as follow-up financing does not necessarily have to be taken out with the same bank.

Selling real estate requires careful consideration, especially for those who need to sell for various reasons. Due to the huge downturn in the real estate market, sellers may have difficulty finding interested buyers. The situation could improve with a possible reduction in interest rates by the European Central Bank, which could make real estate financing easier and purchasing attractive again. Ultimately, it is advisable not to act hastily and to consider all available options.