The dream of owning a home is bursting more and more often

Created: 06/29/2022, 08:00

By: Hans Moritz

Densely packed and yet unaffordable for many: the newly built housing estate at the Poststadl in the north-east of Erding on the B 388. © Hans Seeholzer

This is only good news for land and real estate owners and investors: prices are shooting through the roof more and more uncontrollably. 

Erding - Because many people will have less money in the near future due to inflation and galloping energy prices, the circle of those who can fulfill the dream of owning their own four walls is getting smaller and smaller.

In the district, this applies in particular to the city of Erding, for which current figures are now available.

The regional report of the German Real Estate Association (IVD) for the Munich area is anything but a reading subject to entertainment tax.

While the surge in prices could soon be over, the general public will not benefit from it.

The figures determined by the IVD for the springs of 2012 and 2022 show how prices in the district town have developed.

Existing single-family houses here cost an average of 530,000 euros ten years ago.

Today it is already at 1.02 million euros.

In 2012, one square meter of condominium in the portfolio cost around 2,100 euros, compared to 5,680 today.

Rents have also risen sharply: from EUR 8.70 per square meter in existing buildings to EUR 14.20.

The IVD explains that rather good locations were taken into account for the survey.

Prof. Stephan Kippes, head of the IVD market research institute, comes to the conclusion: "The desire to own a home is becoming increasingly difficult to realize due to high purchase prices and construction costs as well as currently sharply rising building interest rates." The Munich region will also be very popular in spring 2022 .

According to Kippes, the demand on the residential real estate market remains high and the price level continues to rise.

In the Erding district, prices have risen by 2.3 percent since autumn 2021 alone.

However, he sees a trend reversal looming: "The times of steeply rising purchase prices could soon be over for a certain time," according to Kippes' prophecy.

In the current times of crisis, several opposing factors worked together.

"Although the rise in interest rates and the effects of the Ukraine war with the imposed and planned sanctions on the real estate market could have a dampening effect, these uncertainties could also increasingly motivate private and institutional investors to place money in the safe haven of a real estate investment," says the researcher .

Grotesk: Experts are also anticipating a drop in demand because more and more people are no longer considering home ownership.

This means that even if the increases should be over, it has no meaning for the majority (anymore).

From a socio-political point of view, the rental market is also not very pleasing: The IVD comes to the conclusion that the increase in rents has “slowed down somewhat”.

High inflation and the massive increase in energy prices “will continue to drive up ancillary housing costs in particular.

Tenants with lower, but also middle incomes in particular are facing financially difficult times here.”

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In terms of price, not only the IVD finds out that Corona has hardly had any effect on the real estate market.

However, Kippes notes that the requirements for the desired property have changed.

In addition to properties with their own balcony, terrace or garden, those that offer sufficient space for working from home are also in demand.

Against the background of no longer having to be present in the office every day, further distances to the regular workplace would be accepted.

This in turn fuels prices in regions that are further away from the metropolises.

In garages and parking lots, more and more attention is being paid to a charging infrastructure.

"In view of the energy supply, which is perceived as increasingly unstable, more attention is paid to the topic of solar systems in houses and this is perceived as a corresponding advantage - and also rewarded," says the regional report.

Against the background of rising energy costs, the focus of buyers and tenants is not least on the energetic condition of the building.

So far, that has been rather irrelevant.

The situation in Freising is even more precarious than in Erding.

According to the IVD, prices have risen significantly more than in Erding over the past six months.

The association suspects the significant recovery at Munich Airport after the pandemic to be the reason.

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