Living: rising rents attract capital investors in real estate market

Sunken interest and rising ropes increasingly attract investors to the real estate market. This reports credit brokers. Accordingly, private individuals who want to invest money in real estate are more important to loans. Banks also see a return of large investors. This can already be seen in rising real estate prices, for example with apartment buildings.

The Munich credit broker Interhyp observes a high interest in real estate investments. “In our figures you can see that demand for investors grew more strongly last year than with owner users,” says CEO Jörg Utecht. Each fourth financing concluded through Interhyp was an investment in 2024 (25 percent) – after 22 percent in the previous year.

In the final quarter of 2024, the trend accelerated. There were private investors who buy an apartment for rent, for 26 percent of the finished financing. The highest level of 27 percent in 2021, shortly before the end of the real estate boom, is closer.

Rising prices – real estate market stabilizes itself

Low interest rates had led to a historical increase in housing prices in Germany until the interest rose vigorously. Real estate prices have been noticeable since the 2022 maximum. The market has now stabilized with interest in the meantime. The demand from consumers for real estate loans is growing again – albeit at a low level.

For investors, the combination of lower interest rates is attractive compared to 2023 and rising real estate prices, explains Interhyp boss Utecht. In addition, growing rents ensured improved return prospects.

The Frankfurt credit broker Hüttig & Rompf makes similar observations. In 2024, the construction financing of investors had increased by 27 percent. They have thus returned to the real estate market almost twice as strongly as self -users.

The reason is the temporary interest, it said. “In contrast, we expect an environment to be increasing and therefore positive return prospects for real estate investors.” In addition, living space remains scarce.

“Great investors return to the market”

How big the pressure on rents is recently showed figures from the Association of German Pfandbrief Banks (VDP) for the fourth quarter of 2024. According to this, the new contract rents in apartment buildings grew by 4.6 percent at the same period last year.

Realing rents make real estate interesting not only for private individuals. The VDP, which represents around 50 real estate financiers, also observes a grown interest of large investors. In the fourth quarter, prices for apartment buildings rose above average by 2.9 percent in the same period last year.

This shows that “some large investors are returning to the market,” says managing director Jens Tolckmitt. In contrast, in the case of ownership, which includes single -family houses and condominiums, the prices only rose by 1.2 percent.

“No end to the rental stairs”

The real estate association Germany Süd sees the activities of large investors more as a “tender inventory”, as market researcher Stephan Kippes says. “This is not a real push.” However, rents would continue to rise, also says Kippes. On the one hand, housing construction has broken in, but the need for housing in large cities such as Munich or Stuttgart is still increasing. “We still have population growth.”

“Many people can no longer afford residential property,” says VDP general manager Tolckmitt. Therefore, many flocked to the rental market, which still increases the pressure there. “An end to the rental stairs in the sought -after cities is not to be expected.” In contrast, he does not see a new boom in the purchase prices. “For this, the interest would have to fall significantly.”