Escalating property costs hinder new homeowners from entering the real estate market
Crunch Time for Munich Property Buyers as Prices Surge
Hey there! The latest survey from mortgage broker Interhyp has some troubling news for potential property buyers in Munich. It seems that rising real estate prices are making it harder for folks to find an affordable home. The survey shows that just 55% of respondents found residential real estate in their area as easily or moderately affordable - a four-point drop from the previous year and a reduction from two years ago.
Interhyp's survey, which is based on online responses from around 1,000 people who have shown interest in buying real estate, have been searching for the past two years, or have purchased a property in the past five years, is said to be representative of this group.
See-sawing Property Market
The unstable real estate market has been experiencing ups and downs over the past few years. In 2022 and 2023, a steep increase in interest rates made it difficult for many potential buyers to afford properties. Two years ago, only half of the respondents considered residential real estate in their area to be affordable. As sellers struggled to offload their properties at the prices they initially hoped for, prices plummeted almost across the board.
However, according to Interhyp, that phase is now over, with residential real estate prices climbing by around five percent since January 2024. At the same time, mortgage interest rates have dipped slightly. Jörg Utecht, CEO of Interhyp, suggested that this increase in real estate demand was the reason for the pricing uptick. Almost two-thirds (68%) of survey participants estimated that real estate prices had gone up over the past 12 months.
To add to the picture, data from JLL for the second half of 2024 indicates that Munich's residential property prices increased by 3.7% year-over-year, further backing Interhyp's observations. Overall, it seems that the downward trend for residential property prices in Munich is officially behind us.
Investors may find profit in the current state of Munich's housing-market, as residential real-estate prices have surged by approximately 5% since January 2024. This upward trend, according to Interhyp's survey, is driven by increased demand in the property market. Conversely, potential buyers might face challenges in finding affordable housing due to the surging prices, as only 55% of respondents found residential real-estate easily or moderately affordable. Businesses specializing in finance and investing could assess the current condition of the Munich housing-market and make informed decisions accordingly.
