Why it makes sense to buy a property now

Currently, property prices have fallen in many places, and interest rates for financing have stabilized. Where prices have only fallen slightly, prospective buyers currently have significantly more room for negotiation. Is now the right time to buy a property?

Why you shouldn't wait any longer

Purchase prices in some areas fell drastically last year, primarily due to declining demand. According to the Federal Statistical Office, residential properties in Germany became 8.4 percent cheaper on average compared to the previous year. Existing buildings in need of renovation or properties in the outskirts of some cities saw even steeper price drops. There are now some real bargains to be found.

Price negotiations are currently much easier. According to an analysis by the mortgage broker Interhyp, buyers have recently secured an average discount of three to four percent on the originally asking prices for their desired properties. Significant price reductions like these have not been seen on the real estate market for years. At the height of the boom in May 2021, buyers paid an average of 2.5 percent more than the asking price.

Mortgage rates have also eased. While in October of last year it looked as if they could rise to almost five percent, the average interest rate for a loan with a ten-year fixed term is now around 3.5 percent.

If not now, when?

The favorable window of opportunity could soon close, as stable interest rates and lower property prices are likely to re-energize many previously frustrated buyers. This could cause prices to rise rapidly again. Initial signs of this trend are already visible. According to the Europace House Price Index, prices for existing residential properties have risen for the fourth consecutive month. The price index for condominiums climbed from 204.40 to 206.96 points in March, and for existing houses, it increased from 192.24 to 192.76 points in April. This trend reversal could continue.

Right now, in this phase characterized by still relatively low purchase prices and stable interest rates, the timing seems ideal for acquiring a property. Therefore, it can be worthwhile for potential buyers to seize this opportunity and act. A reputable local real estate agent can help you find the right property. They can also recommend an independent financial advisor who can find suitable financing for you.

Do you need assistance with your property search? Contact us! We'd be happy to advise you.

Notice

For the sake of readability, this text uses the generic masculine form. Female and other gender identities are explicitly included where relevant to the statement.

Legal notice: This article does not constitute tax or legal advice for any specific case. Please consult a lawyer and/or tax advisor to clarify the facts of your individual situation.

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