According to the Federal Statistical office, apartments and houses increased in price in the past year by more than five percent. That could change now. The majority of experts is sure: the real estate market will suffer from the slump in the economy. “Many buyers are holding back because they fear for their Jobs or shrinking incomes to be expected,” says Michael Voigtländer, real estate expert at the Institute of German economy (IW).
flat viewings, which, in principle,
It’s now come to less transactions. Apartment visits could not take place, the notary dates not. “In such a Phase as now, in the many thoughts to do their Job, no one really knows how it goes, be exposed to large investment decisions or moving into a larger apartment, only once,” adds Voigt countries.
Although apartment viewings in principle are prohibited, however, some Federal States allow for exceptions, such as if otherwise, the vacancy or homelessness threatens. Mass there will be no tours currently, but only single dates. Removals may be made by professional moving companies, provided that the distance and hygiene rules are observed. Also back common Google queries on the keywords Buy, Rent, or Reside as an indicator.
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real estate-losing giant billion in market value
A glance at the world’s largest real-estate group Simon Property makes the serious effects of the Corona-crisis. The US company has lost within a month, two-thirds of its market value. 30 billion euros just gone, every day a billion. Europe’s real-estate giant Unibail-Rodamco Westfield has lost in a few weeks, more than 8 billion euros of market value. Particularly hard-hit owners and operators of shopping malls and restaurant owners shop.
The Numbers of the real estate climate of the German mortgage Bank, a subsidiary of NordLB, helps, the developments on the German market to classify. In March, the financing of commercial real estate and capital market business, specialised Bank recorded a decline of almost four percent compared to the previous month. Most Hotel real estate were affected.
so Far, residential real estate, are considered to be solid, unshakeable money, and equipment. In short: as a concrete-Gold. The share price of the Bochum real estate group Vonovia reveals why this assumption is put to the test. While the share certificates of the company have cost at the beginning of March for 53,14 Euro, were you in the meantime for only 38,20 Euro. Currently, the papers note at around 44 euros. Vonovia Devant & nbsp; 44.31 EUR -0,14 (-0,32%) Xetra
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protests To the rate of data
Vonovia, the Corona-crisis has not affected the growth in rents – which have been shown during the financial crisis. Also, there is no relevant existing supply chain that could be interrupted by the spread of the pandemic.
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don’t buy those Who needs to, in the crisis no property
Günter Vornholz, Professor of real estate Economics at the Bochum EBZ Business, assesses the situation on the real estate market as follows: “those Who do not need to buy in the crisis, no real property or moves the move to a larger apartment.“ Moreover, potential buyers – at least those who hold shares have lost in the recent stock market Crash a lot of money.
Also, landlords are uncertain because of possible loss of rent. Because according to a Bundestag decision of tenants between April and June is allowed to fall in default of payment, without that you quit may be. The decision helps people get because of the Shutdowns, short-time working money and now have higher shares of their income for the apartment will need to spend.
Large housing company tenants have already made concessions: As LEG Immobilien waived during the Corona-crisis for the time being, on rent increases, or terminations. Also Vonovia in the current Situation of higher Rents, Deutsche Wohnen has agreed to hours payments.
Private landlords, who suffer partly under the lease of the desire can make from the three-month postponement of payment for loans contracts use. Commercial landlords can also rely on loans from the KfW. Germany’s largest money advice: Ask your question to Corona-follow
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First banks to tighten the requirements for construction loans
While the platform Immobilienscout24 recognize currently no decline in real estate demand, according to Zoopla – the British counterpart of Immobilien scout 24 – in the UK the demand in the penultimate weeks decreased by 40 percent compared to the previous week. In the Wake of the Corona-measures of the British real estate market has come almost to a Standstill.
This development is mainly due to the fact that the British government says the visit of real estate – complete. Estate agents can only advise on the phone, banks assign less mortgage loans. And so, the two largest real Estate lenders in the country, Barclays and Lloyd have tightened their criteria. Means the borrower must also have at least 40 per cent equity.
in this country, banks could consider in the future, more precisely, who can afford what are the loads really. “Of course, it could be that some of the banks could provide in case of prolonged Stop of the current situation in the future, higher requirements, for example, the amount of the repayment or the equity,” says Mirjam Mohr, Interhyp-Head of the Department for the private client business, and adds that such a development is not observed currently.
anyone Who buys a property will benefit from favourable conditions. “The Corona-crisis has sent mortgage interest rates first decline and now rise slightly. Despite the increases in construction loans, however, is very cheap,” says Mohr. According to Interhyp, Germany’s largest intermediary of private mortgage lending, the terms and conditions for ten-year loans is currently still below 0.7 percent. It remains debatable whether real estate buyers in this uncertain market phase of a long-lasting debt in the purchase. The current development will lead many people to feelings of insecurity.
real estate industry could suffer more than in the financial crisis
If building loans-interest rates rise, could the real estate prices stagnate or fall. Background: In almost every real estate financing banks to help with loans, usually with up to 80 percent of the purchase price. If building loans-interest rates rise, can not be compensated for additional costs through higher rental income. Consequently, the value of a property would decrease.
the head of The ifo Institute, Clemens Fuest expects that Germany will have to accept a higher government debt – after all, the Federal government will have to use billions of euros to avert a deep recession. Therefore, the interest rates for German government would increase bonds in the medium term. “Instead of the current money by his debtors for sales, is Germany will have to pay for his debt also the interest,” says Fuest. The same applies then also for property owners.
observers and market participants report that hardly any apartments are bought. Therefore, the Institute for urban, Regional and housing research expects that the real estate market under the Corona of a pandemic to suffer more than under the global financial crisis. Almost 12 years ago, purchases plunged by about 12 per cent. Reliable data on the current business on the German real estate market are not available yet.
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*The contribution of “prices are falling, mortgage rates are rising: real estate industry is facing major challenges,” published by the stock exchange on Sunday. Contact with the executives here.