Real estate market with new, different opportunities

The rapid turnaround of the real estate markets in Germany and Europe has unsettled many people. The discussions about it are predominantly negative. But the effects are not the same for everyone. Who wins and who loses now is an exciting question.

A comparison of current asking prices with those of the previous year shows: In 51 of 54 medium-sized German cities surveyed, prices for existing flats have fallen within one year, in eleven cities by at least ten per cent. The largest percentage declines were in Bayreuth, Lüdenscheid, Lüneburg and Schwerin, each by 15 per cent. Prices also fell in the most expensive medium-sized cities, in Constance by minus six per cent and in Rosenheim by minus seven per cent.

Germany is not alone in this development. An analysis of the real estate markets in seven selected European countries shows: The European real estate markets are groaning under rising construction interest rates. While the average interest rate in all countries was still around one percent in January 2021, construction interest rates in the European countries have risen to almost four percent.

With an average asking price of 3,222 euros per square metre, Germany is the second most expensive of the countries surveyed. Only in tiny Luxembourg do property buyers have to dig deeper into their pockets, at 8,969 euros. It is followed by France with 3,199 euros per square metre and Portugal with 2,475 euros per square metre.

Rising interest rates are dampening demand. However, the ImmoScout24 WohnBarometer shows that demand for purchase properties is rising again after a decline in the second half of 2022, especially in the metropolises. Among the 25 German cities with the highest demand are four out of seven metropolises: Stuttgart is followed by Cologne, Düsseldorf and Munich. However, condominiums are currently most in demand in the smaller cities of Heidelberg, Bochum, Mühlheim an der Ruhr and Karlsruhe.

For buyers, the further development on the real estate market could offer the chance to fulfil their desire for their own four walls.

(Photo: © ID 9685995, Pixabay)