If you want to buy an apartment or a house, you can currently enjoy very cheap loans. Interest rates on the capital market fell sharply. There is much to suggest that it will remain cheap for the time being.
Frankfurt / Main (dpa) - The corona crisis means that property buyers can take out very cheap loans. If you want to buy a house or apartment, you can secure conditions close to record lows, observe credit brokers.
The prospects are also good. Even negative building rates will come into focus again, they believe. In this case, borrowers would not even have to repay a loan in full.
"The uncertainty caused by the corona virus has led to an all-time low in building rates," says Mirjam Mohr, head of private customer business at Interhyp. According to the finance broker, the majority of borrowers can take out ten-year fixed-rate loans for around 0.6 percent a year, with a good credit rating of 0.4 percent.
Interhyp compares the offers of over 400 banks. Measured on the previous month, the conditions had recently improved by 0.1 percentage points. Even loans with a fixed interest rate of 15 years, with which consumers can secure low interest rates for a long time, would be offered at well below one percent.
The big financial sales Dr. Klein sees ten-year construction loans from some regional banks starting at 0.31 percent, while mortgage broker Hüttig & Rompf sees a "realistic lower limit" of around 0.35 percent. With 15 years of fixed interest rates, the conditions would be around 0.5 percent at best. "Until further notice, a positive interest rate for real estate financing will be common even with the best creditworthiness," says boss Ditmar Rompf.
Since the stock markets slumped due to the Corona crisis, many investors fled government bonds. They are considered relatively safe. The yields on ten-year government bonds, which are based on building rates, have meanwhile dropped to a record low of less than 0.80 percent. In addition, central banks such as the US Fed have drastically cut the key interest rate, which is depressing the overall level of interest rates on the capital markets.
The low interest rates for real estate loans are a relief for consumers, who can hardly cope with the rapidly increasing prices, especially in cities. With the real estate boom, the volume of home finance in Germany has swelled in 2019. New business grew to a high of EUR 263 billion, the consulting firm PwC recently analyzed. Many people invest their money in real estate, as otherwise there is hardly any interest saved.
Even if the yields on federal bonds have recently climbed a bit again: the conditions for real estate loans are likely to remain good for now. "We continue to expect low interest rates on real estate loans over the next few weeks and over the year," says Mohr of Interhyp. At most, a slight increase is conceivable - for example, if government bonds are no longer in such high demand because the German state has to spend a lot of money on aid programs.
Will the Corona crisis even result in negative interest rates on real estate loans, as was speculated in autumn? Apart from a few promotional loans, that is not yet an issue, says Interhyp. Only some loans from the state development bank KfW result in negative interest when redemption subsidies are included. "Many banks have set positive minimum interest rates," says Mohr.
If property buyers take up construction money with a minus interest, they get a discount from the bank: Instead of a loan amount of 200,000 euros, they would then only have to repay, for example, only 199,000 euros.
Michael Neumann, CEO of Dr. Small private customers, considers negative interest rates unlikely at least in the short term. "The impending economic downturn can lead to higher risk costs and higher mortgage lending terms on the part of the banks." There is currently maximum uncertainty on the capital market, which should take weeks. He continues to expect an "extremely attractive interest rate level" for builders, buyers and follow-up financing. "Given the current level of interest rates, I think it is inappropriate to speculate on even lower interest rates," he advises consumers.
However, some people shy away from the financial risk of buying a property in the face of the Corona crisis. "There has been a decline in customer inquiries for a few weeks now," says Rompf. This is due to the uncertainty surrounding the virus pandemic.
Stefan Mitropoulos from Landesbank Helaba believes the hottest phase on the property market may be over. All property cycles in Germany have ended in recession in the past few decades, says the economist. Apartment purchases are dependent on positive income expectations: "Those who expect economically difficult times do not borrow hundreds of thousands of euros."