If you want to be on the safe side in life, you need a solid financial basis. The best way to accumulate wealth at a young age is to invest in real estate when interest rates and prices are low. Now is the right time to do so.
After property prices had only risen for more than ten years, they fell significantly from 2023 onwards. Hardly anyone could afford the high purchase prices. They fell more sharply than they had for 60 years. In addition, the European Central Bank (ECB) has cut interest rates for the sixth time in a row due to falling inflation. This is cause for optimism.
Good and bad times alternate on the real estate market. The question already arises as to whether the low interest rates will soon cause property prices to rise more strongly again, as the motto on the real estate market is: falling interest rates, rising prices. A promising window of opportunity is currently opening up for real estate purchases.
Economists assume that the scope for further interest rate cuts has now been exhausted. "The ECB's interest rate cut was expected by the markets and had already been priced in. The main refinancing rate is now relatively just above the inflation rate. Rising wages and growing government debt could lead to inflation not falling further, but rather rising again," says ifo President Clemens Fuest. Heiner Herkenhoff, Managing Director of the German Bankers Association, argues similarly: "There are good reasons why the ECB should continue the recently launched debate on a gradual pause in interest rates.
Anyone deciding to buy a house or apartment now can expect a stable development. Buying interest has already picked up speed. The conditions for buying a home are favorable: stable interest rates, relatively low property prices and rising incomes. On average, EUR 308,272 was borrowed to buy a property in Germany in 2024. Anyone who bought a home in the two northernmost federal states last year needed an average of around EUR 100,000 less money from the bank than people in Bavaria or Baden-Württemberg. On average, buyers were 38 years old.
Graphic: © Sprichbeidl, Pixabay
