The situation on the real estate market: to buy or not to buy?

At the beginning of 2023, the real estate market has changed considerably compared to previous years. Those interested in buying are uncertain whether they should now implement their purchase intentions as quickly as possible or rather wait. The days of cheap construction money of one percent or less are definitely over. The real estate market is in upheaval.

The further expected rise in interest rates is an argument in favour of making a quick grab for the right property. It is true that the factors that influence interest rates are difficult to predict at the moment. No one knows exactly how inflation, economic strength and energy prices will develop. But those who have found the right property will probably not be offered it again later.

One argument in favour of waiting is that the supply of real estate will probably increase strongly in the future and prices for certain properties will fall, for example for properties in need of renovation with poor energy efficiency. Energy consumption has become a critical factor in property searches Prices for renovated properties in good locations are expected to remain stable.

The further development of the real estate market depends on various factors, including interest rate development, price development, new construction figures, demand and currently also energy policy.

High new construction figures increase the supply of housing and ease the tension on the housing markets - especially in the big cities. Recently, however, construction completions have fallen far short of the political target of 400,000 new flats per year. Construction companies were hit by a wave of cancellations because builders threw in the towel due to construction costs that were often almost impossible to calculate and rapidly rising construction interest rates. Projects were put on hold or cancelled altogether.

Conclusion: The real estate market for second-hand houses and flats is in a phase of adjustment and waiting. The new framework conditions are causing a shift in demand from buying to renting. This results in a weaker dynamic of the purchase price development.

(Photo: © Gerd Altmann, Pixabay)