Many people can no longer afford their own house or apartment. It’s not just real estate prices that continue to rise, but a loan now costs considerably more.
The mortgage broker Interhyp expects real estate interest rates to rise further to between 3.5 and 4 percent by the end of the year.
Currently, the average interest rate for ten-year loans is 3.1 percent, more than three times what it was at the beginning of the year. This was reported by board member Mirjam Mohr on Wednesday in Munich. Since at the same time construction and real estate prices have continued to rise, many interested parties can no longer afford their own house or apartment, according to Interhyp. “A lot of people in Germany feel this rude awakening.”
Last year there was a “last minute panic” on the residential real estate market, said the manager at the presentation of the company’s new “living dream study”. This year, many interested parties would have a completely different feeling: “I missed the train.” The demand for real estate financing is still high – but at least some interested parties are no longer receiving financing commitments due to limited financial resources and high costs. Interhyp had 2,180 people interviewed for the study in February and March.
Loans cost significantly more
According to a sample calculation from 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. With an interest rate of four percent, it would even be over 114,000 euros more, as the company announced.
According to Interhyp, one consequence of the very high prices in the cities is urban exodus – with the effect that prices in the areas around Berlin, Frankfurt and Hamburg rose much more sharply in the first quarter than in the actual city. Mohr named Berlin as an example. In the Berlin area, prices shot up by more than 12 percent in the first quarter, but by only four percent in the city.
According to this, many city dwellers are forced to buy a house or apartment in a rural environment and are not very satisfied at first. “City, country, frustration,” said Mohr. The reason for this are restrictions on the three Cs: social contacts, culture and consumption. According to the survey, at least 42 percent of rural property buyers struggled with their decision.
Interhyp does not expect a general, Germany-wide price decline for residential property. “We assume that prices will rise more slowly,” said Mohr. In some regions there could definitely be price declines, but not across the board.
Source: Stern
Jane Stock is a technology author, who has written for 24 Hours World. She writes about the latest in technology news and trends, and is always on the lookout for new and innovative ways to improve his audience’s experience.
