As of: March 27, 2024, 6:05 a.m
By: Lisa Mayerhofer
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After a major lull, interest from potential property buyers now seems to be increasing again (symbolic image).
© IMAGO/Michael Gstettenbauer
Interest in real estate is increasing again: banks are seeing increased inquiries about construction financing.
Interested parties can now save costs, especially in a city.
Munich – After a major lull, interest from potential property buyers now seems to be increasing again.
In any case, more offers for construction financing are being received from banks again, reports the
Handelsblatt
.
“In January we had the highest number of inquiries ever in our private customer business,” says Stefan Hillbrand, board member at Germany’s largest mortgage broker Interhyp, to the newspaper.
Real estate market: There are more inquiries for construction financing again
After the sharp declines last year, Hillbrand is even calling 2024 “the year of recovery”.
It's not just Interhyp that makes this observation: "In January we saw an increase of over 30 percent compared to the previous year," says Stefan Münter, CEO of the financing platform Europace, to
Handelsblatt
.
Customer inquiries have often resulted in concrete loan agreements.
The experts hope for further growth this year.
The reasons for the increasing interest in investing in real estate may be that real estate prices have fallen again and the situation on the interest rate market has improved.
The average building interest rates have fallen noticeably for the first time in two years and are currently below the four percent mark again, reports the real estate portal immowelt.
Real estate and construction financing: Loan repayment costs have fallen noticeably
In addition, the monthly costs for loan repayment have decreased noticeably.
At its peak, buyers save 346 euros per month compared to the peak of the real estate crisis, an immowelt analysis shows.
The change in annuity rates when purchasing a 75 square meter existing apartment was examined for the 15 largest German cities.
The monthly burden when buying real estate in March 2024 at an average interest rate of 3.6 percent was compared with October 2022, when interest rates jumped to four percent for the first time since the end of the low interest rate phase.
For the example calculation, 30 percent equity (including additional purchase costs) was assumed and the repayment was calculated over a period of 30 years with a fixed interest rate of 10 years, explains immowelt.
Analysis: Hundreds of euros can be saved in Munich
The result: The savings are most significant in Munich.
With an average asking price of currently 602,625 euros for a 75 square meter apartment in the Bavarian capital, the annuity is currently 2,092 euros per month.
In October 2022, not only were the interest rates higher, but also the price level: the average price at that time was 668,853 euros.
This resulted in a monthly rate of 2,438 euros, the real estate portal reported.
The conclusion: Thanks to lower prices and interest rates, buyers in Munich are currently paying 346 euros per month less than a year and a half ago.
Calculated over the year, you have to pay over 4,000 euros less for repayment and interest.
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Costs have also fallen in other cities: in Frankfurt, immowelt has a monthly saving of 257 euros, and in Stuttgart it is 246 euros per month.
In Cologne it is still 164 euros per month and in Hamburg 154 euros per month.
“The situation on the real estate market has now improved significantly after almost 2 years.
“Due to the fall in prices and the decline in building interest rates, buying property has become realistic again for many people,” summarizes Felix Kusch, Managing Director of immowelt.
“There is much to suggest that now is a good time to buy.
In addition to lower monthly costs when repaying the loan, interested parties currently benefit from the large range of properties on the market.
Due to the still subdued demand, there is still room for negotiation on prices.”