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Inflation-related interest rate increases - Is purchasing real estate still attractive?
How difficult or easy is it to purchase a property? Five years ago there was a lot to be said for a purchase. Interest rates were less than one percent, while the prices for houses and apartments had not yet risen quite as much as in 2021 and 2022. Conversely, there was much to speak against a purchase from summer 2022 onwards because the high inflation after Russia's attack on Ukraine made financing massively difficult. “High interest rates coupled with still high prices and a weak economy significantly dampened demand,” says Roger Bendler from the Essen brokerage firm Van der Meulen, “a slow turnaround is emerging...
Inflation-related interest rate increases - Is purchasing real estate still attractive?
How difficult or easy is it to purchase a property? Five years ago there was a lot to be said for a purchase. Interest rates were less than one percent, while the prices for houses and apartments had not yet risen quite as much as in 2021 and 2022. Conversely, there was much to speak against a purchase from summer 2022 onwards because the high inflation after Russia's attack on Ukraine made financing massively difficult. “High interest rates coupled with still high prices and a weak economy significantly dampened demand,” says Roger Bendler from the Essen brokerage firm Van der Meulen, “but a slow turnaround is now becoming apparent.”
According to a report by rp-online.de,
Current developments on the real estate market show a slowly emerging turnaround. Five years ago there was a lot to be said for buying a property due to low interest rates and comparatively moderate prices. In 2021 and 2022, real estate prices rose significantly. However, there is much to be said against buying from summer 2022 due to high inflation after Russia's attack on Ukraine, which made financing massively difficult. This led to a significant dampening of demand on the real estate market.
The effects of these developments could be diverse. Due to the difficulty of financing due to high interest rates and rising prices, the demand for real estate could continue to decline. This would mean that the market might calm down somewhat and prices could stabilize or even fall slightly. This could mean more favorable conditions for potential buyers. On the other hand, investors could act more cautiously due to the weaker economy and uncertain economic situation, which could lead to a decline in investments in real estate.
Overall, there are signs of a change in the real estate market that could potentially lead to an adjustment in prices and investment behavior. This should be closely monitored by market experts and potential buyers and investors to make the best decisions.
Read the source article at rp-online.de