Buying real estate: Are there bargains again?

If you ask current real estate and market experts when is a good time to buy real estate, many will say: "Now". Because, according to one Article on Spiegel.de the signs that a turnaround in the real estate markets will occur as early as this year. If property prices rise again, the favorable opportunity will have been missed.

With the interest rate shock, higher financing interest rates met with high real estate prices. As prices were no longer affordable for many, property sellers had to meet prospective buyers with their asking prices last year. As a result, property prices fell. However, initial indicators suggest that the trend will soon move in the opposite direction again.

Falling inflation - falling interest rates?

While inflation was still at over 6% in summer 2023, it had already fallen to 3.2% by November 2023. Investors are now speculating that the European Central Bank (ECB) will cut interest rates as early as this spring. This will naturally have an impact on mortgage rates. Last December, the interest rate on ten-year German government bonds fell below the two percent mark for the first time in a year. Building interest rates also fell, from over 4 percent to around 3.5 percent for a ten-year loan. According to financing experts, the current situation offers considerable financial relief for property buyers.

Low prices - high prices

According to figures from the Federal Statistical Office, property prices fell by an average of 10.2% between July and September 2023. However, it is important to note the different speeds at which the individual real estate markets in Germany developed. This is because while prices fell drastically in some regions, they hardly fell at all or only slightly in others. It is therefore advisable to ask a local quality estate agent how the real estate market is developing in your region.

However, if interest rates fall, demand for real estate could rise again. If demand rises, prices generally rise again. The current low level of construction activity is also ensuring that there is still a shortage of properties on offer. Some real estate analysts expect property prices to rise again in 2025 or even as early as the end of 2024. This means that the window of opportunity for buying a property will soon close again.

Good opportunities for price negotiations now

In the current situation, the opportunities for prospective buyers to negotiate prices are better than they have been for a long time. Real estate experts recommend being open about your financing limits. Negotiating prices and explaining financing options is the job of a professional estate agent. Let them support you. Take advantage of the current combination of a favorable negotiating position for prospective buyers and falling construction interest rates before it is over.

Are you looking for support with your real estate search and purchase? Please contact us! We will be happy to advise you.

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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