Movies

Popular rental properties: Increasing interest rates depresses interest in buying real estate

Most popular rental items
The rise in interest rates depresses the interest in buying real estate

German interest in real estate purchases has decreased significantly. This is due to the increase in interest rates. But the development also has something good: Suppliers would lower prices due to low demand, explains ImmoScout24 head Crockford. Therefore, higher interest rates would be “at least somewhat amortized”.

Due to the sharp rise in interest rates, there are signs of a turnaround on the German real estate market. The demand for properties for sale in the first quarter of 2022 fell by 17 percent in one year, as reported by the online portal Immoscout24. Online listings of residential properties for sale are also longer than the previous year, as it is more difficult for sellers to find buyers. “Instead, a lot more people are looking for properties to rent again,” she said.

“These developments could have a dampening effect on price developments in the medium term,” said Gesa Crockford, CEO of ImmoScout24. The additional costs for buyers due to higher interest rates could at least be slightly amortized. Despite the slowdown, however, demand for real estate is still well above the level at the end of 2019 and therefore before the Crown crisis. The basis for this is the average number of contact inquiries vendors receive for their ads over the first seven days.

The ads for condominiums on ImmoScout24 were online for an average of 37 days across Germany from January to March, while a year ago they were advertised after only 30 days. In the case of single-family homes, the ad duration was extended from 32 days to 34 days. “Meanwhile, rising interest rates and the resulting significant increase in total costs when buying a property are putting a damper on many potential buyers.” That’s why more and more people are looking for properties to rent again. Although the demand for such residential properties at the beginning of 2021 decreased by 11% compared to the previous year, it increased by 28% in the first quarter of 2022. As a result, the available supply of rental properties decreased by 23%. percent, while the supply of properties for sale increased by 15 percent.

Furthermore, ImmoScout24’s analysis shows that in the first half of 2022 approximately double the number of suppliers reduced the prices of residential properties for sale compared to the previous year. The asking prices of six per cent of single-family homes and nine per cent of condominiums were reduced. In the first half of 2021, this affected only three percent of advertised homes and six percent of apartments.

About the author

hiyabad

Leave a Comment