The German residential real estate market has apparently already more than recovered from the Coronavirus’ shock. Several reasons ensure that a new record level is partly reached. Only the sellers are still hesitant.
For example, the nationwide real estate agent Homeday speaks of a "clear, positive trend": In the past two weeks, there have been an average of 20 percent more viewing requests and even up to 38 percent more purchase requests than before the outbreak of the pandemic in Germany.
"Demand for residential property greater than before the crisis"
The relevant Google searches around the purchase of real estate have also reached a new record level in view of the past 12 months. The slump in demand as a result of the Coronavirus’ crisis has "long since been overcome".
"For about three weeks now, we have seen that interest in buying is back and that demand for residential properties is even greater today than it was before the crisis," explains Homeday Managing Director Steffen Wicker.
Germans are looking for security and bargains
The experts cite three reasons for the positive development. On the one hand, private investors would increasingly rely on real estate in times of crisis. In April, 44 per cent of investors interested in real estate said they wanted to invest in a property because it promised more security than equities, in a consumer survey conducted by market research firm YouGov on behalf of Homeday.
Another reason could be the hope of prospective buyers for a crisis-related "bargain" in the real estate market, the experts say. According to the study, 39 percent of prospective buyers expect property prices to come under pressure as a result of the COVID-19 pandemic. In addition, 37 percent expect a better interest rate on their real estate loans in the wake of the crisis.
Sellers of real estate still sceptical
"But neither we nor other real estate experts are seeing a real fall in the price of real estate right now. From our point of view, this is not necessarily to be expected," says Wicker. "Everything stands and falls as the pandemic progresses. With a somewhat gloomy course still, we expect it to be stable so to only slightly lower prices for residential real estate in Germany."
In addition to the high demand, price stability is currently being helped by a reduced number of residential properties that are coming onto the market for purchase compared to the previous year. Although this trend is now positive again, the number of advertisements newly published per calendar week in Germany is currently still around 20 percent below the previous year's level.
Note: The basis for the calculation is the evaluation of all published purchase offers of private residential properties in Germany from more than 350 sources, including all major real estate portals.
Text: Paulo Lopes