Interhype: The “rough awakening” for many real estate prospects
Loans for real estate buyers in Germany are becoming more and more expensive.
Many people can no longer buy their own house or apartment. Not only have real estate prices continued to rise, but the cost of a loan is now significantly higher.
Munich. Mortgage broker Interhype expects real estate interest rates to rise further to 3.5 to 4 percent by the end of the year.
Currently, the average interest rate for ten-year loans is 3.1 percent, which has more than tripled at the beginning of the year. This was announced by board member Mirjam Mohr on Wednesday in Munich. Since construction and real estate prices continue to rise at the same time, many prospective buyers can no longer afford to buy their own home or condominium, according to InterHip. “Many people in Germany feel this rude awakening.”
Presenting the company’s new “Housing Dream Study,” the manager said the housing market has experienced a “last-minute panic” over the past year. Many interested parties will feel very differently this year: “I missed the train.” The demand for real estate financing is still high – but at least some interested parties will no longer receive a financing commitment due to limited financial resources and high costs. For the study, Interhype surveyed 2,180 people in February and March.
Borrowing costs are high
According to a sample calculation by the Check24 portal, an effective interest rate of three percent means that a loan of EUR 400,000 by the end of the ten-year fixed interest rate will cost EUR 78,000 more than in January. As the company announced, that would be more than 114,000 euros at an interest rate of four percent.
According to Interhype, the consequence of very high prices in the cities is urban exodus – with the effect that prices in the areas around Berlin, Frankfurt and Hamburg rose significantly more in the first quarter than in the actual city area. Mohr took the name Berlin as an example. In the Berlin area, prices rose by more than 12 percent in the first quarter, but only by four percent in the city center.
As a result, many city dwellers are forced to buy houses or apartments in rural areas and are initially not very satisfied. “City, country, desperation,” said Mohr. This is due to limitations in the three Cs: social interaction, culture and consumption. According to the survey, at least 42 percent of rural home buyers are wrestling with their decision.
Interhype does not anticipate the typical drop in prices for residential real estate across Germany. “We assume that prices will move more slowly,” said Mohr. In some regions there could well be price declines, but not across the board.
© dpa-infocom, dpa:220622-99-759460/2