Why are building interest rates falling? Experts recommend financing, but the construction industry remains skeptical

Effects of the interest rate slide on the real estate market

The recent decline in building interest rates has a direct impact on the real estate market. Experts believe that demand for real estate will increase and prices will rise. Now is the best time to complete financing as there is still room for negotiation and supply is outstripping demand. However, the construction industry remains skeptical as building permits are declining due to the rise in interest rates and banks' stricter lending rules.

Why are building interest rates falling?

According to expert assessments, the American Federal Reserve Bank and the European Central Bank have probably reached the peak of key interest rates, which will lead to a fall in interest rates. Inflation in the Eurozone has fallen, but the desired inflation target has not yet been achieved. In addition, the yield on ten-year federal bonds, transactions with Pfandbriefe and competition between banks have also made favorable interest rates possible for real estate transactions.

Expert assessment and recommendations for consumers

Financing experts advise financing now, as there is still room for negotiation and supply exceeds demand. A long-term fixed interest rate is recommended in order to have planning security. Even after ten years, borrowers have the option of switching to a new loan if interest rates have fallen.

Impact on the construction industry

The construction industry is feeling the effects of the rise in interest rates over the last year and a half, leading to a decline in building permits and an increase in construction prices. KfW funding has stopped due to the budget crisis and the banks have become stricter when it comes to granting loans.

According to a report by www.br.de,