Real estate: Building interest rates are shooting up due to the billion dollar debt package

The planned billion dollar debt package from the SPD and Union has serious consequences for house builders. The construction interest rates have drastically increased in the course of rising returns for federal bonds. According to Frankfurt FMH financial advice, interest of around 3.6 percent were recently due for real estate loans with a ten-year term. A week earlier, the annual interest rates were still 3.4 percent on average and 3.38 percent half a year ago. Since domestic builders or real estate buyers often accept hundreds of thousands of euros in debt, small interest rises are already expensive.

“Strongest weekly rise since the financial crisis”

The Barkow Consulting analysis house wrote that last week the interest rates for construction financing with a ten -year term had climbed to the highest level in seven months. At the same time, it was “the strongest weekly increase since the global financial crisis 18 years ago”.

With the plans of the SPD and Union to loosen the debt brake for defense spending and to create a special fund of 500 billion euros for the infrastructure, turbulence on the bond markets occurred. The courses of ten -year federal bonds broke into this with which the German state absorbs fresh money. In return, the returns rose as much as since the reunification in 1990.

Investors expect the federal government to offer investors more interest in the course of increasing debt. The ten -year federal bonds are considered to be trend -setting on the capital market, including building interest rates are based on their return.

Credit broker: Four percent construction interest possible again

The real estate loan interhyp now expects an increased interest rate level. On the basis of the majority information surveyed banks, construction interest rates are likely to move between 3.5 and 4 percent in the course of the year, Interhyp wrote recently. “Specifically, more than 70 percent of the banking panel assumes an increased level of interest in the second half of the year, last month with 57 percent, significantly fewer experts forecast rising interest rates for this period.”

The most recent increase in construction interest could noticeably dampen the demand from consumers for construction loans. With falling key interest rates, the building interest rates had noticeably gave in a few months ago, which had led to a strong recovery in building finance. Real estate prices have recently increased slightly again.

Headwind for real estate market

With the interest rate increase, the real estate market threatens a new stress test. There is also uncertainty on how trade conflicts have an impact on interest and economic growth in the United States and whether the central banks can reduce the key interest rates as much as the end of months ago.