Challenges in the German Real Estate Market
The German real estate market faces significant challenges that prevent many families from affording their own homes. High construction costs and rising purchase prices are just a few of the factors weighing on buyers.
High Prices and Limited Selection
With a budget of under 500,000 Euros, only construction sites or undeveloped plots are usually available. The increasing construction costs and high real estate prices severely restrict the selection.
Regional Differences
Real estate prices vary drastically by region. In expensive cities like Munich, one can only get a small 66 square meter apartment for 500,000 Euros, while in cheaper areas like the Gotha district, one can purchase a house with 310 square meters.
Construction Costs and Interest Rates
High construction costs and increased interest rates reduce construction activity. In 2022, building permits declined, putting more pressure on the housing market.
Impact on Saving Behavior and Investment Decisions
Saving Behavior
Many Germans need to adjust their saving behavior to finance the dream of owning a home, requiring longer saving periods or alternative financing models.
Investment Decisions
Due to high prices, many potential buyers prefer renting to buying or search for cheaper locations. Regional flexibility can be advantageous due to local price differences.
Forecasts and Developments
Experts predict a decline in real estate prices by about 8 percent by 2025. However, in some cities, rental and purchase prices continue to rise, depending on local demand.
In summary, the immense costs in the real estate market burden many families in Germany, making regional flexibility and adjustments in saving necessary to fulfill the desire for a home.