Hamburg (ots) – The increased real estate financing interest rates in combination with inflation and high energy costs are deterring almost 80 percent of Germans from purchasing a property. This is the result of a nationwide, representative survey commissioned by Engel & Völkers Finance, an independent real estate financing broker. In order to make their dream of owning their own home a reality, 75 percent of those surveyed would prefer to use more equity so that the loan amount remains lower. Over 90 percent would limit their private consumption and 54 percent of those taking part in the survey are prepared to switch to an existing property instead of financing a new building. Overall, 67 percent of those surveyed stated that real estate financing was not possible for them without an inheritance or gift. That’s even 5 percent more than in the previous year.
More equity and foregoing consumption for your own property
“The general conditions in the real estate industry have changed massively in the last two years,” explains Rebecca Scheidler, Managing Director of Engel & Völkers Finance Germany GmbH. “The real estate financing interest rates have quadrupled, the costs for existing properties remain at a fairly high level and new construction has come to a standstill in many places.” Three quarters of those surveyed said that they would prefer to use more equity to keep the loan amount lower. 92 percent of Germans would also be willing to make a voluntary restriction in order to make their dream of owning their own property come true. For example, 60 percent would forego expensive clothing and shoes, and the same number would forgo buying an expensive car. Around half of all respondents see potential for saving money by avoiding expensive furnishings (50%), beauty and wellness products and activities (49%) and going to restaurants (46%). “Despite the challenging current situation, real estate financing is still possible for many people if the right adjustments are made,” explains Scheidler. “It is important to seek advice as early as possible and check what is possible and necessary.”
Existing properties instead of new buildings
In addition to the adjustment screws in financing, there is of course also the possibility of saving on the property itself. 54 percent of those surveyed are prepared to finance an existing property instead of a new building. Among 50 to 59 year olds it is even 60 percent. A cheaper location in another part of the city or a rural area is also an option for 40 percent. 37 percent would choose a different type of housing and finance a terraced house or an apartment instead of a single-family home. Among 30 to 39 year olds it is even 47 percent. 37 percent would also choose less high-quality equipment (e.g. no elevator in an apartment building) in order to keep costs lower; for 36 percent, a smaller garden or no garden at all would be conceivable.
Additional purchase costs are a deterrent
In addition to real estate prices and building interest, the high additional purchase costs, such as real estate transfer tax and long approval processes, also cause reluctance to finance real estate. “Politicians are also called upon here; a reform of the property transfer tax is urgently needed,” says Rebecca Scheidler. She adds: “The recently passed construction turbo pact, which the federal and state governments agreed on, is a step in the right direction, but the issue must be continually advanced.” The pact stipulates that planning and approval processes should be simplified and accelerated so that construction projects can be planned and implemented more quickly for a limited period of time in places with high demand.
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