Stable financing conditions continue to make buying a property calculable. Although the real estate market is still weak, demand for properties for sale has recently risen significantly in the major cities.
The new real estate business of the institutions that are members of the Association of German Pfandbrief Banks (vdp) improved by 6.9 percent compared to the same period last year. The increase is primarily due to the granting of residential real estate loans: From January to September 2024, financing for the construction and acquisition of residential real estate reached a volume of EUR 56.7 billion, an increase of 16.0% compared to the same period of the previous year (Q1-Q3 2023: EUR 48.9 billion).
These figures are also a signal for the German real estate industry, which is currently experiencing difficult times. New residential construction is not gaining momentum and there is a shortage of affordable housing everywhere. Prospective buyers have slowly become accustomed to the changed financing conditions and owners willing to sell are no longer willing or able to wait for better returns.
The standard rate for real estate financing is EUR 1,350 at the end of 2024, down EUR 25 on November. The downward trend had already begun in the summer. The monthly installment calculated as an example for a loan amount of 300,000 euros, two percent repayment, 80 percent loan-to-value ratio and ten years of fixed interest rates makes it possible to compare the burden of mortgage financing over longer periods of time: According to this calculation, borrowers paid 1,435 euros in the same month last year and as much as 1,455 euros in December 2022. The current amount is the lowest in almost two and a half years.
The loan amount that property buyers took out with a bank reached a record high of EUR 319,000 in December 2024. This is €5,000 more than in November and even €22,000 more than in the same month last year. Borrowers borrowed the same amount from a bank in December 2021 to fulfill their dream of owning their own four walls.
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