Property prices: buy real estate despite the interest rate shock

Whether in the big city or in the countryside: real estate has become more expensive again in the past year. Prices for one- and two-family houses increased by 8.4 percent compared to the previous year and for owner-occupied apartments by 7.8 percent. Compared to the previous quarter, the price increase of 0.5 percent and 0.7 percent was already significantly lower.

Even more dramatically, mortgage interest rates have tripled since the beginning of the year. Instead of a zero or one, there is usually a three or four before the decimal point. This makes buying a house or apartment a financial feat.

However, our price tables for all cities and districts in the Federal Republic also show that there are certainly places where a purchase is still affordable. We help you find them.

Why researching real estate prices is worthwhile for you

  • Property prices for the whole of Germany. Our real estate price inquiry includes the prices of condominiums and single-family houses in various locations and furnishings for all 401 independent cities and districts in Germany, as well as apartment rentals and the regional purchase price/rent ratio (as of the fourth quarter of 2021). The figures for the third quarter of 2022 are already available for the seven largest German cities. After activation, you can download the data for up to 20 independent cities and districts of your choice.
  • trial calculations. We use examples to show the monthly burden that builders and homebuyers have to deal with today, and how high credit interest rates and administration costs are compared to rent.
  • Buy or rent? The Finanztest experts explain for whom it is still worthwhile to buy, despite the high initial burden, and why it is important to be aware of the local relationship between purchase price and rent.
  • Graphics on rent and prices. Our map of Germany shows the square meter prices for condominiums in all cities and districts at a glance. Also: Diagrams of the development of prices and rents in Germany and in the seven largest German cities.
  • Magazine article as PDF. After activation, you will receive the magazine article from Finanztest 1/2023 on property prices in the top 7 cities and from Finanztest 8/2022 on property prices nationwide for download, as well as other articles on the property market that have appeared. in Finanztest since January 2021.

Square meter prices under 2,500 euros

The overview of prices shows where real estate is particularly expensive and where it is not. The regional differences are large. The data helps to find out where ordinary wage earners can still afford their own four walls and where they can no longer afford them – and under what conditions it is still worth buying.

The good news: In most cities and districts, the bill for buyers looks much better than in metropolises with high property prices such as Munich and Berlin. Square meter prices are lower there and also significantly cheaper compared to rents.

In 173 of the 401 rural districts and districts in Germany, there are still owner-occupied apartments in good locations for less than 2,500 euros per apartment. square meters, including ten districts with more than 100,000 inhabitants. In almost half of all districts, apartments in good locations cost less than 25 annual rents.

It still pays to buy

After the interest rate increase, house and apartment buyers can expect to spend significantly more per month on housing than on a rental apartment. In order not to overdo it financially, you should determine the maximum purchase price you can accept before you start looking for a home. Our short check (see below) will help with this.

Despite higher prices and interest rates, it still pays to buy. The prerequisites are solid equity and a sufficiently high income to be able to bear the increased credit burden in the long term. Potential buyers must also pay more attention than ever to price and solid financing. We give five tips for your financing.

The local purchase price-rent ratio mentioned in the price tables is important. In many cities, condominiums cost more than 30 and sometimes even more than 40 years of rent. With such a high purchase price-to-rent ratio, it is almost impossible to finance your own four walls. They then only pay off if there are high rents and value increases in the future. But they might not happen.

property prices
Buy real estate despite the interest rate shock

Quick check: Determine the maximum property price

Tip: Our large comparison of property financing shows how you can proceed wisely with property financing and which loan offers are the best.

Price development on the property market

What a house or apartment costs, how much share buyers have to travel at least, and what monthly burden they face – it depends primarily on the location. A price atlas helps with orientation. Stiftung Warentest provides a detailed overview of purchase prices and rents for all 401 independent cities and districts, which were paid at the end of 2021 depending on location and equipment. Prices and rents for the seven largest German cities have been updated for the third quarter of 2022.

The data comes from vdp Research, the research institute of the Association of German Pfandbrief Banks (vdp). To determine the price, the experts evaluate around 350,000 real estate sales annually, which were financed and recorded in detail by around 700 banks. The special thing about the prices determined by vdpResearch: they are based on actually concluded sales contracts, not on advertisements or broker surveys.

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