Better buying opportunities: Significantly more properties on the market

The reluctance to buy on the German real estate markets due to low interest rates is resulting in a significantly greater supply. This gives prospective buyers a better chance of finding a property. Even for those with comparatively little equity.

Purchase prices for real estate have recently fallen in many regions of Germany. This was partly due to the significant rise in interest rates, but also to the uncertainty felt by many people caused by the war in Ukraine, inflation, high energy costs and the decline in economic strength.

The resulting reluctance to buy has led to significant price reductions on the one hand and more choice on the other, as fewer properties have been sold and there is more supply than in recent years. Nevertheless, prices are still at a high level compared to the typical financing options available to buyers. Prospective buyers still have a good chance of finding their dream property if they prepare well.

Good preparation is particularly important now

To do this, it is necessary to recognize where your own financing limits lie and under what conditions the banks are prepared to support the purchase. In principle, the creditworthiness requirements have hardly changed. What is new is that refurbishment obligations or the replacement of the energy source are factored in with discounts. The rule of thumb still applies: the purchase installment should not exceed one third of the net household income. Despite current interest charges of around 4%, financing is not impossible. Example: With a typical repayment rate of 2%, a property with a purchase price of between 350,000 and 400,000 euros can be financed with a couple's net income of 5,000 euros and 100,000 euros in equity.

Locations have different purchase levels

However, the number of square meters that can be purchased depends heavily on the purchase price levels in the various locations. In major cities such as Munich, Hamburg and Berlin, the apartment will be smaller than in small and medium-sized towns such as Weimar or Kassel. Prospective buyers should disclose their financing options to sellers in the current market situation, even if the purchase price is slightly above their own limits.

Quality estate agents are able to mediate between different price expectations of owners and buyers and create solutions. If the right property is not immediately available, it is worth creating a search request with the local estate agent, which also contains the financing limits. In this way, suitable offers can be submitted before they appear on the real estate portals.

Rising rents, falling real estate prices

If you have only been able to save a small amount of equity, you are not automatically out of luck. Buying a property can still be worthwhile, even if it is no longer possible to buy as many square meters as last year. In contrast to the continuing fall in prices for properties for sale, rents are set to rise sharply again in the coming months. This is the unanimous expectation of Germany's leading economists.

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Note

For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where this is necessary for the statement.

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.

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