Renovation of older houses is worthwhile

A rethink is taking place in the real estate market. The demand for real estate is shifting towards cheaper properties, as rising interest rates and the cost of living are making financing more difficult. When buying or selling older properties, the focus is now on the energy standard. 

Purchase demand has shifted towards cheaper properties since the rise in interest rates. This is shown by the evaluation of demand based on ImmoScout24 data before and after the interest rate rise. 

A large proportion of prospective buyers can only afford cheaper properties since the rise in financing costs. In the first quarter of 2023, when interest rates were around four percent, demand therefore shifted to properties in lower price categories between 250,000 euros and 550,000 euros. In the same period of the previous year, properties in the price range of 550,000 euros to 850,000 euros were still most in demand. 

The increased interest rate level often means a monthly instalment burden twice as high as during the low-interest phase. After interest rates had been in constant flux for over a year, experts now assume that interest rates will remain at the current level for longer. This means more planning security again.

A current evaluation shows how the asking prices for properties have developed year-on-year depending on the energy efficiency class: Class A and B properties in the independent cities are almost stable in price. The asking prices for properties in energy efficiency classes C and D have declined, falling by eight percent in the cities. In classes E to H, the price decline is five per cent. 

Future-oriented owners of older properties, but also prospective buyers and sellers, cannot avoid thinking about refurbishment. In addition to the new EU requirements for energy efficiency in the building sector, the amendment of the Building Energy Act is also causing a rethink in the real estate market. The trend is clear: older properties remain in demand and expensive if their energy condition meets the new requirements. A refurbishment increases the value of the property and pays off in any case. 

(Photo: © Gerd Neufal54, Pixabay)