The real estate market in Germany is preparing for a collapse
2022.11.23 02:18
The real estate market in Germany is preparing for a collapse
Budrigannews.com – In a study that was released on Wednesday, the DIW research institute stated that there is a growing risk of price corrections in the German residential property market.
Konstantin Kholodilin, a co-author of the report, stated, “We are not facing the bursting of a huge real estate price bubble in Germany.”However, owner-occupied apartments and homes could see price reductions of up to 10%.”
The study found that rents have only increased by 4% while prices for owner-occupied homes and apartments have increased by an average of 11% this year in 97 cities across the country that were surveyed.
It stated that “property prices should develop in line with rents in the long term” because property purchases are refinanced by rental income or, in the case of owner-occupation, by saved rent payments.
According to the study, high demand and low supply contribute to rising property prices in numerous locations.
Due to less favorable financing conditions, increased construction costs, and, in many places, a shortage of workers, the population of major German cities is growing while too few new homes are being built.
Malte Rieth, a co-author, stated, “Politicians should quickly give new construction activity a boost by speeding up procedures and increasing public investment in construction.”
