As of: March 15, 2024, 5:44 a.m
By: Dirk Eilinghoff
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A building plot that is for sale.
© IMAGO
Do you really want your own four walls, but recently the high building interest rates have kept you from your dream?
Find out here why now could be a better opportunity.
Whether it is the right time for your own property obviously depends heavily on your personal situation and the prices and offers in your desired area.
Overall, spring 2024 could be a better opportunity if you want to get started as soon as possible - for several reasons:
Building interest rates have fallen slightly
At the beginning of 2024, we are a long way from historically low building interest rates (even below 1 percent pa a few years ago).
Compared to the previous year, however, the situation has eased slightly: while building interest rates fluctuated by an average of 4 percent from autumn 2022 to the end of 2023, they have mostly been lower since the beginning of 2024.
With a lot of equity, interest rates of up to just under 3 percent are possible.
How much cheaper does this make your financing?
A loan of 400,000 euros will cost you more than 200 euros less per month if your interest rate is 3.5 percent instead of 4.2 percent.
With an initial repayment of 2 percent, you will save more than 30,000 euros in interest over the entire term.
Recalculate again
If you've been putting off buying a house for the past year, now might be a good time to take another look at the project with fresh numbers.
We do not expect any significant declines in interest rates in the coming months.
The ECB's first key interest rate cuts, which are expected from summer onwards, are already included in the current offers.
In order to get a good interest rate comparison and thus an individual offer, you should find out more from your bank and also speak to a financing agent.
We at the non-profit money guide Finanztip recommend Dr.
Klein*, Interhyp*, Baufi24*, Hüttig & Rompf and PlanetHome.
Also try to pay as much of the purchase price as possible without a loan: the more equity you have, the better interest you will get.
Prices probably won't fall any further for now
Perhaps you have recently speculated that purchase prices for real estate will continue to fall.
With falling demand due to the interest rate turnaround at the beginning of 2022 and the heating replacement debate, prices fell on average in 2023 - especially for old buildings.
The German Economic Institute (IW) puts the price decline for single- and two-family homes at just under 10 percent.
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However, this trend is becoming increasingly weaker: According to the IW and the real estate platform Europace, the prices for existing houses have largely stabilized again at the beginning of 2024.
So at the moment it's hardly getting any cheaper, and soon it'll probably be more expensive again.
Because demand is increasing again.
So now is a good opportunity to take advantage of the slightly lower price level and the fairly large offering.
So you better hurry up if you want to buy soon anyway.
Think about renovation costs
You should definitely take advantage of the energetic condition of the property when negotiating.
Make it clear to the seller if you have high costs after the purchase because you even have to renovate certain things (e.g. insulation or heating).
You can read all the details in the Finanztip guide to energy-efficient renovation and in the Finanztip book “Energetic renovation: Simply explained”*.
Would you rather have a modern but more expensive new building anyway?
Then use funding programs to curb the higher costs.
In the Finanztip guides you will find everything about general KfW new building support and the home ownership program for families.
The new construction crisis will have consequences
The high prices for new buildings are also due to the fact that the supply here is scarcer.
Because very little is being built in Germany: According to current figures from real estate market research Bulwiengesa, only around a quarter of the usual residential construction projects started in the last quarter of 2023 - while the Federal Statistical Office is reporting a total decline in building permits of around 27 percent for 2023 .
At the same time, many people continue to move to Germany.
What that means: Living space is becoming increasingly scarce, especially in big cities.
Therefore, you must expect sharp increases in rents in the near future - and therefore a higher demand for property, so that property prices are more likely to rise again.
And of course you also protect your own four walls from rent shock.
Conclusion
Slightly lower building interest rates, great pressure on rental prices, the end of falling purchase prices and possibly still good negotiation opportunities - it actually seems to be a very good time at the moment if you are interested in a property.
But remember: In most regions, prices are still very high in relation to building interest rates.
Before making such a big decision, calculate carefully what you can really afford.
The mortgage calculator and the repayment calculator from Finanztip will help you with this.
And what happens if you don't want to buy a house but rather sell it?
Then take a look at the Finanztip guide for selling a house and, if necessary, get help from the Finanztip broker recommendations Homeday* and McMakler*.
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This article is available to IPPEN.MEDIA as part of a cooperation with the non-profit money guide Finanztip - the original for this article “
You want to buy a house?
When you shouldn’t wait too long
” comes from the weekly Finanztip newsletter from March 8, 2024.
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