Real estate markets

Good mood on the US housing market despite Corona

The US housing market has so far come through the corona pandemic largely unscathed, despite exploding unemployment, many corona infections and already quite high real estate prices. But the mood on the housing market collapsed only briefly, only to reach a higher level immediately afterwards. House prices are currently stagnating and are at their all-time high during the pandemic. Three percent for a 30-year standard mortgage – never before have houses been financed so cheaply. The market environment is accordingly attractive for buyers with a secure job. The search for a suitable home is already more difficult. The supply of real estate is scarcer than ever before. The low interest rates will continue to support demand and stabilize the market in conjunction with the scarce supply of real estate. The danger of a noticeable price correction is also decreasing in view of the economic recovery that has begun. On the…

Is someone raising his ugly head?

Inflation is the spectre of financial investors. Especially those who earn their bread in the bond market can remember earlier crash phases that wiped out the price gains of many years in a short period of time. These price slumps were actually always triggered by interest rate hikes by central banks, which in turn reacted to rising inflation rates or expectations. Today, we live in times of extremely low interest rates, and monetary policy is more expansive than ever before. Fresh liquidity, which the central banks pump into the markets to support prices, creates an extreme environment. Investors are looking for returns, and they are increasingly difficult to find. Bond market, stock market, real estate, precious metals – wherever you look, prices are extremely high. The greatest danger would be an end to the expansive monetary policy and a switch by the central banks to a restrictive course. This could…

German real estate market passes corona stress test: The buyers have not turned away

After the long upward trend, the German real estate market has survived the first stress test. The low level of infection has had a positive effect on the real estate market, even though retailers and hotels were hit hard by the lockdown. The housing market has come through four months of pandemic best. Buyer demand has proved robust. Stable real estate lending in April and May underscores the continued interest in home ownership. Purchase prices maintained their high level from April to June despite increased unemployment and the job cuts announced by many companies. The low interest rates are helping here, as buying a home is often cheaper than renting. In addition, residential letting has proved to be crisis-proof. The rental arrears feared after the outbreak of the pandemic have largely failed to materialise. Supply-side rents even increased slightly in the first half of the year. Although investments in commercial…

Corona and Home Office turn the office market upside down

Due to the pandemic, the home office topic has gained enormous momentum. However, the path from the temporary solution with laptop at the kitchen table to the opportunities that flexible working can offer is further than it seems at first glance. Many as-pects must be considered. There are various reasons for flexible working, such as lower space costs for offices or savings in the daily commute to work. Less traffic benefits the environment. And the compatibility of family and career can possibly be improved. Those who spend less time in the office are more likely to live outside, thus relieving the tight housing markets in the big cities. First, however, the corona crisis will lead to a decline in office demand on the previously tight office markets. The low vacancy rates should rise noticeably, while the partly high office rents will probably decline. Over the long term, the demand for…

Corona pandemic ends German real estate boom

The corona pandemic not only ensures the lockdown of economic activity, it also puts an end to the roughly ten-year boom on the German real estate market. Previously, the smoothly running economy, growing employment and falling interest rates had lifted property prices to what were in some cases high levels. Since 2009, prices for owner-occupied residential property have climbed by 55 percent across Germany, doubling in the seven largest cities. In the case of commercial property, rental yields have halved to less than 3 percent. However, even before the outbreak of the Corona pandemic, the real estate market was no longer running smoothly. In the case of apartments, the rise in prices and rents slowed down, especially in expensive cities. In addition, new regulatory interventions are making the letting business more difficult. Rents are already falling in the retail sector. If a short recession and a strong recovery remains, thanks…

German housing market: Prices rise somewhat more slowly despite falling interest rates

Prices on the housing market continued to rise in the third quarter of 2019. This is shown by the price index recently published by the Association of German Pfandbrief Banks. However, the rise in prices for owner-occupied homes and apartment buildings acquired by investors has subsided, especially in Germany’s seven largest cities. In 2017, residential property prices in the high-priced cities still rose at double-digit annual growth rates. Prices in these cities are now rising at less than 4 percent a year. Price dynamics are even more pronounced outside these conurbations. Between July and September, purchase prices for owner-occupied homes and apartment blocks rose by around 6 percent nationwide. For a long time, the metropolises raised real estate prices, while the „province“ slowed down – for over a year now it has been the other way round. There are various reasons for the slowdown in inflation. However, this is not…

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