BUYING AND SELLING PROPERTY IN THE INTEREST RATE TURNAROUND

For years, the property market was influenced by a low supply of properties, prospective buyers outbidding each other and, most recently, the shortage of building materials. The low interest rates for property financing meant that demand was high – as were property prices. The property world has changed since July 2022: With the European Central Bank raising the key interest rate, financing rates rose, offers to sell increased significantly and property prices fell in some cases. The seller’s market became more of a buyer’s market.

Prospective buyers are currently in the advantageous situation that the high supply of properties means that competition with other buyers is decreasing. This does not necessarily make selling easier for owners, as prospective buyers can now choose the best offer. This makes it all the more important for sellers to address the needs of prospective buyers in a targeted manner.

What is currently important to prospective property buyers?

Energy and food costs have risen. Prospective buyers are increasingly looking for properties with good energy efficiency in order to reduce the burden on their household budget. Properties with average or poorer energy efficiency ratings are usually cheaper. However, prospective buyers should carefully calculate the costs of thermal insulation, a new heating system or other refurbishment work so that it does not end up being more expensive than a modern property. Interested parties are therefore strongly advised to seek expert financial advice, during which various financing concepts are calculated.

As the construction and financing costs for refurbishments and conversions have also become more expensive, prospective buyers pay attention to a suitable room layout. The less they have to change, the more attractive the property becomes. Location continues to play an important role for buyers. People are generally more attracted to the centre of a city. However, those who want more living space, land and peace and quiet also look for properties on the outskirts of the city or in the surrounding villages. A good infrastructure with shops, doctors and transport links is particularly important here. The advantage of such locations for prospective buyers: Property prices are generally lower.

What should property owners bear in mind when selling?

The increased supply of properties means that prospective buyers are taking a much closer look and are also more courageous when negotiating prices. It is not only important to present the property attractively, respond promptly to enquiries and organise professional viewings, but also to negotiate fairly. A careful valuation by the estate agent lays the most important foundation for this. An objective assessment of the current market value gives both owners and prospective buyers the confidence to ask or pay a reasonable price.

The recent changes on the property market and the difficult forecast for future property prices and building interest rates make selling and buying a property even more complex than it already is. This makes it all the more important to seek professional advice.

Our estate agents at Victor Investment will be happy to provide you with detailed and individual advice on your plans to buy or sell a property in and around Berlin. Contact us at any time!