Last year saw the first positive signs on the property market. The new year now offers good opportunities and conditions for property buyers. Prices and interest rates are stable. This makes calculations easier.
Wages have risen, inflation is within the European Central Bank's (ECB) target range, interest rates are stable and property prices are still relatively low after a significant decline in 2022 and 2023. These are good conditions for buying property in 2025, although the political situation in Germany and the rest of the world is uncertain and does not make forecasts easy.
In December 2024, construction interest rates were lower than they have been for a long time. This could remain the case at the beginning of 2025 and in the first half of the year. Experts assume that construction interest rates will be in the range of three to 3.5 per cent in 2025. The second half of the year is difficult to predict because there are too many uncertainties. The ECB last cut its key interest rates in mid-December. This move has already been priced into the construction interest rates by the market. The same applies to one or two slight interest rate cuts in the first half of 2025.
Like interest rates, property prices have tended to move sideways over the past year. There was already a slight upward trend in the last quarter of 2024. Price increases will be more pronounced in metropolitan regions than in structurally weak regions. However, the trend will be the same across the board. Price surges are unlikely until 2025.
Interest in buying a condominium is increasing, reports the property portal ImmoScout24. Across Germany, demand for condominiums rose by 63 per cent within a year, and by as much as 78 per cent in the major cities. The most sought-after condominium in Germany has three rooms, 74 square metres of living space and costs 320,000 euros. The most sought-after flat in Frankfurt am Main is the largest at 81 square metres and the smallest in Munich at 69 square metres. The price range for the most sought-after flat extends from 220,000 euros in Leipzig to 562,000 euros in Munich.
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