The market for residential real estate is unaffected by the Corona crisis, and prices continued to climb as if the pandemic had never happened. At the same time, this phenomenon makes potential buyers lose hope for bargain purchases.
Residential real estate is steadily rising in price
The German economy was hit hard overall by the corona pandemic, only a few industries or sectors maneuvered through the crisis unscathed. One branch of the economy that got off lightly from the pandemic is the real estate industry, especially the market for residential real estate.
Prices seem to continue to rise here, completely unaffected by the crisis, without having to post any significant price losses. This impression was confirmed by a data collection by the Federal Statistical Office, accordingly, the prices of residential real estate rose in the second quarter of 2020 – despite the economic crisis – by 6.6 percent compared to the same quarter of the previous year.
Potential buyers have given up hope of any bargains when buying residential property, as a study carried out by YouGov for the real estate agency Homeday has now shown. Homeday boss Steffen Wicker commented on this finding, according to Handelsblatt: “During the pandemic, many prospective buyers hoped for bargains. These have meanwhile largely been smashed. “
The hope for bargains has vanished
In the course of the survey, 3,259 people were asked about the influence of Corona on the real estate market and what further developments they suspect.
While 27 percent of the test subjects consider the corona pandemic to have no influence on prices, 34 percent are even expecting higher property prices due to the crisis. Only 29 percent believe that purchase prices will fall. Whereas in May 48 percent of the test persons still believed that Corona would have a negative impact on price developments.
The same applies to the purchase interest on residential property, here too the majority expects interest rates to continue falling. 34 percent of the survey participants expect better interest rates and only 18 percent fear that loan rates will rise due to the corona pandemic.
However, 46 percent of potential buyers suspect more complicated processes regarding the purchase process. This is compared to 32 percent who do not fear any cuts in the sales process from Corona. 21 percent believe that the crisis will actually make the process easier.
The size becomes more important
But not only the prospects with regard to the purchase process and property prices have changed in the wake of the corona pandemic, the demands on the desired property have also increased – in the truest sense of the word.
A total of 37 percent of the test persons adapted the criteria to the coveted property during the crisis.
An impressive 35 percent are now looking for a larger property than before or during the first wave of the corona pandemic. When asked, “What criteria […] due to the corona situation now (additionally) a role [spielen]? “, The desire for a city property lies directly behind the size of the property, but this criterion has lost some of its importance in the last six months. While it was still an important aspect for 28 percent in May, it only played a significant role for 24 percent of those surveyed in October.
The prospects of potential buyers have also shifted significantly with regard to the purchase price. In May, a low property price was the most popular criterion with 39 percent; today it only plays a role for 18 percent of the test subjects. This could be accompanied by the fact that the respondents no longer believe in bargains anyway and accordingly accept the current price range for granted.
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