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Houses in Stuttgart: New buildings are becoming too expensive in many places
Photo: IMAGO / IMAGO/Wilhelm Mierendorf
Cooperative bank representatives expect prices for houses and apartments to fall in many regions of Germany in the coming months. According to a survey, 71 percent of the board members of the cooperative association expect a mostly slight decline in the price of residential real estate in their respective regional markets in the second half of the year.
The cooperative association, based in Neu-Isenburg near Frankfurt, represents institutes in all federal states with the exception of Bavaria and Baden-Württemberg.
For 2024, almost half of those surveyed expect prices to continue to fall. However, for the coming year, significantly more of the board members are of the opinion that real estate prices will remain constant (37 percent) or increase slightly (13 percent).
"On balance, there is a bottoming out on the real estate market," says Ingmar Rega, Chairman of the Board of the Association of Cooperatives, interpreting the results. "The current level of long-term lending rates would then become the market standard in the long term."
High construction costs slow down new construction
The boards of the 229 institutes that took part in the survey are pessimistic about the financing of new construction projects. The majority expects a slight or strong decline in 2023 (73 percent) and 2024 (63 percent). "In addition to the turnaround in interest rates, this is mainly due to significantly higher construction costs," Rega said, classifying the results. "In order to revive the new building, bureaucratic hurdles should be reduced."
The recent rise in lending rates is making it more expensive to finance real estate. "Especially under the current conditions, customers must have a good credit rating and, above all, sufficient equity," said Rega. Those who bring in more of their own money usually get a slightly cheaper loan.
mmq/dpa