Decline in real estate prices in the Lake Constance region – How does this affect building financing?

Decline in real estate prices in the Lake Constance region – How does this affect building financing?

How www.suedkurier.de reports, the real estate market in the Lake Constance region is affected by a change. After years of the real estate boom, real estate prices in Germany have fallen overall. This is also reflected in the Lake Constance region, where demand for real estate has fallen significantly. Older properties in particular, especially properties in need of renovation, have experienced price drops of between 15 and 20 percent.

The reasons for this change lie in increased interest rates and construction costs, which have led to higher burdens on real estate financing. Funding programs for new buildings were also canceled, which further aggravated the situation. These changes have resulted in demand for construction financing in Germany falling, even though loan interest rates have fallen.

The impact on construction financing is significant. New business with real estate loans to private households and the self-employed fell by 10 percent. At the 50 savings banks in the southwest, lending business relating to real estate financing also fell by a good half last year.

Despite the general decline in the Lake Constance region, the total loan volume in the housing finance sector at Volksbank Bodensee-Oberschwaben is still above the banking average in Germany.

Building interest rates have recently fallen and are expected to continue to fall slightly until the end of 2024 due to interest rate steps by the ECB. However, home builders face challenges such as a lack of funding programs, high construction costs and difficult building regulations. The large loan volume for a single-family home in the Lake Constance region is no longer affordable for many families, which means that condominiums are increasingly being sought as an alternative.

Due to the reduced supply of new buildings, buyer demand is increasingly focused on used properties. In addition, there is increasing demand for renovation loans and follow-up financing for existing real estate financing.

Overall, it can be seen that the real estate market on Lake Constance is undergoing a change that is changing both the demand for real estate and the type of real estate investments. This reflects the general changes and challenges in the real estate market.