2023-10-07 10:11:51
Economy real estate
Falling prices – the dream of owning your own home is once again within reach
Status: 07.10.2023 | Reading time: 3 minutes
“The range of properties currently on the market is larger than it has been for a long time,” reports Immowelt
Quelle: Getty Images/Westend61
Home ownership has recently become barely affordable. But now the situation is improving. The industry is seeing significantly falling purchase prices, sometimes with discounts in the double-digit percentage range. There are also signs of relaxation on the interest rate front.
For everyone who dreams of owning real estate, the wait could soon be over. For more than a year, prices reacted little to the abrupt increase in building interest rates in 2022. Home ownership was therefore hardly affordable, at least for those prospective buyers who did not have six-figure savings available as equity. Now the situation seems to be brightening somewhat. On the one hand, there have been significant price reductions recently. On the other hand, there are signs of a slight relaxation in interest rates.
In any case, the professionals on the real estate market are already preparing for a new market phase. This became clear at the Expo Real real estate trade fair in Munich this week. “The price correction has largely been completed and an attractive entry level is currently being established on the market again,” says Felix von Saucken, managing director of residential real estate at real estate service provider Colliers. “We see a noticeably corrected price level at the end of the third quarter.”
More about the dream of owning your own home
According to the purchase price collections from the expert committees, there has already been a decline of 25 percent in the top 7 cities. The return, i.e. the ratio of purchase price to income, is “stable” and “underpins the bottom formation”. In other words: prices have fallen so much that professional investors are again looking for entry opportunities.
Where this progresses, the situation for private property buyers also changes with a delay. “The interested parties are ready,” says Sascha Nöske, CEO of the residential real estate provider Strategis. “As soon as something changes in the prices, deals will take place again,” Nöske continued. He doesn’t want to be tied down to a percentage. But things could get interesting again in the “double-digit range”.
“The current situation already offers opportunities for potential buyers”
The real estate portal Immowelt, which, like WELT, belongs to Axel Springer, recorded asking prices that fell by another 1.3 percent in the 14 largest cities from July to October, based on evaluated advertisements on its own platform. Compared to the previous year, purchase prices fell by 6.4 percent. “The difference compared to the price peak, which was reached in May 2022, is minus 9.4 percent,” reports Immowelt, and further: “The current situation on the real estate market also offers opportunities for potential buyers.”
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The difference to the 25 percent discount that Colliers observed is striking. But on the one hand, this is because Colliers has professional portfolios in mind, which were usually extra expensive. On the other hand, Immowelt deals with offer prices – i.e. the ideas and wishes of the seller. Whether these are fulfilled is often a completely different question.
Because many sellers are waiting longer and longer for a buyer: “In addition to the falling prices, the range of properties currently on the market is larger than it has been for a long time and has increased rapidly,” reports the portal.
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Now there is even hope on the interest rate horizon. At the industry trade fair in Munich, reports of a long-term easing in building interest rates made the rounds. “Market developments point to slightly falling interest rates,” says Jan Linsin, chief analyst at service provider CBRE.
“Forward rates for October 2024 are around 60 basis points below the current level of a good four percent. “It won’t get towards three percent until 2025,” said Linsin, alluding to special security returns that investors use to bet on the future. “Investors obviously expect that the current interest rate level will not last.” Home financing is within reach.
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In order to display embedded content, your revocable consent to the transmission and processing of personal data is necessary, as the providers of the embedded content require this consent as third party providers [In diesem Zusammenhang können auch Nutzungsprofile (u.a. auf Basis von Cookie-IDs) gebildet und angereichert werden, auch außerhalb des EWR]. By setting the switch to “on”, you agree to this (revocable at any time). This also includes your consent to the transfer of certain personal data to third countries, including the USA, in accordance with Art. 49 (1) (a) GDPR. You can find more information about this. You can revoke your consent at any time using the switch and privacy at the bottom of the page.
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