The real estate market 2016 - which is changing and which trends are already foreseeable


Real estate will continue to be a valuable asset in 2016, with some cities still leading the way. At present, apartments in Berlin are the most sought-after, but the offer is now more or less exhausted, so that the possibilities of an investment are correspondingly scarce.

Investors are therefore beginning to look for new lucrative locations within Germany. These include, for example, Leipzig, as the Wirtschaftswoche recently reported. Last but not least, the new year also offers some exciting changes that should be considered by both tenants and landlords.

Berlin is still the measure of all things...

... However, supply and demand ensure that rents and purchase prices continue to rise and have been at record highs for months. A survey by the consulting firm EY Real Estate showed that 16 percent of all respondents clearly regard Berlin as the most attractive investment market, especially with regard to private investors from Germany and abroad.

The real estate market 2016 - which is changing and which trends are already foreseeable: real

After a while, Hamburg (13 percent) and Frankfurt (12 percent) followed suit. The survey covered 150 insurers, funds, holdings and other real estate investors. Overall, the survey results are as follows:

Picture 2 A-cities

Picture 2 A-cities

Berlin can not withstand demand

Although many new apartments are currently being created in Berlin, the current demand can not be compensated. Influence has also on the strong influx of refugees, according to a PwC survey among 550 international market participants, after all, 83 percent see immigration as an essential factor that affects the current real estate industry. In addition to these popular A cities, as the metropolitan regions are also called, smaller and medium-sized cities are increasingly being targeted by investors. In this regard, Leipzig and Dresden were and are interesting examples, in many cases they are already being traded as possible future A cities. Precisely because stock levels are becoming increasingly scarce in many cities, more and more people are thinking about initiating new developments - 81 percent of those surveyed expect this to be 62 percent before the end of the year. But no matter which city is ultimately chosen as a real estate location, both the desire for takeover and for investment are unbroken.

However, if you want to invest yourself, you have to take some changes into account in 2016, especially when it comes to financing. Because both builders and real estate runners have to deal with increased demands on credit security in the future.

From 2016 there will be stricter credit checks.

From 2016 there will be stricter credit checks.

From 2016 there will be stricter credit checks.

  • Stricter credit check
    Insofar as the respective financial institution can not prove in the future that it has checked the creditworthiness or the preconditions for lending accordingly, the borrower has the option of terminating his contract at any time - prepayment interest is not due in such a case. Furthermore, the interest rate for the period up to the termination is reduced to the market rate, so that the bank may even have to reimburse a part of the calculated interest. In general, it is worth taking a loan but in any case, when it comes to the purchase of real estate. For many people, they represent an important form of old-age provision. Should an emergency occur and one of the earners dies, the survivors often can not pay the installments. Without proper provision, the new home may even have to be resold, which is why Ergo Direkt recommends classic term life insurance as a protective measure to ensure that financing is secured on a permanent basis.

Real estate and other secure investments

In general, however, the Germans are satisfied with their investment, and this is not just true for real estate. Only in December did the Handelsblatt report that risk-free investments are still being used, even if interest rates are currently very low. The daily or fixed-term money is still used, but the classic passbook is also often used, although the interest rates are hardly worthwhile for some institutions. Other popular representatives are the checking account, the savings letter, bonus savings and the home savings contract. However, the banking association considers this development very critically: because the aversion to riskier alternatives can take revenge, since a return near zero is not sufficient for the long-term accumulation of assets.

Real estate is still one of the most popular forms of investment and is considered a safe investment.

Real estate is still one of the most popular forms of investment and is considered a safe investment.

Real estate is still one of the most popular forms of investment and is considered a safe investment.

If there is talk of real estate, financing also plays an important role. For this purpose, loans are usually taken, because only very few buyers have so much capital that they can handle the house construction or purchase alone. The choice of such a loan should be as forward-looking and thoughtful as possible. Important key data of the financing are, for example, how long the interest rate is to be fixed, which repayment amount is optimal or which forms of financing exist.

In addition to normal loans, which are standard in the construction of houses, homeowners can and should also pay attention to the developments regarding the so-called follow-up financing. This is the possibility of continuing the loan with the previous bank or switching to another provider at the end of the fixed interest period. Currently, the opportunity is favorable, because instead of paying 4 to 6 percent as before, there will in the future only 1 to 2 percent interest in the year. If you use a higher repayment, you can get rid of the debt in 10 to 15 years. This was determined by Stiftung Warentest only a few days ago. The comparison of different offers showed that the opportunity could hardly be better:

  • The cheapest provider in the test awarded the follow-up loan to an effective interest rate of 0.85 percent

However, it is important that borrowers deal with early exit as early as possible. At the latest at the end of the fixed interest period, the bank and the borrower have to agree, but alternatively a debt rescheduling loan can be concluded with another bank in order to repay the remaining debt.

Rent or buy - what makes sense?

With the European Central Bank (ECB) still strongly supporting the financial markets, savers this year are expecting overall interest rates to remain low. Prospective buyers or property owners, on the other hand, can assume that prices will continue to rise. And it looks similar for tenants, because in many places it will be even more expensive for them according Bild.de. There are currently around 800,000 apartments missing for the prospective tenants, so it can happen that a lot of money has to be spent on relatively bad apartments.

Despite rent brake rising prices

Actually, the rent brake should ensure that sudden rent increases are avoided in the future, but currently it is far from being everywhere and even the effect can not fully convince. Due to these uncertainties, tenants still have to adjust to additional costs, because an end to the price spiral is not in sight for the time being.

Picture 5 quote

Picture 5 quote

Lukas Siebenkotten, Director of the German Tenants' Association told rp-online.de:

Since the beginning of the year, the rental price brake applies in almost 300 cities in 10 federal states. However, it was not introduced nationwide, which is also sharply criticized by the tenants' association. At least as regards the additional costs, there are all-clear, here at least no higher heating costs are expected. Although it was somewhat colder at the beginning of the year, energy prices have already given way in 2015 as a whole. Another topic to be considered in 2016 is the handling of rental debt. Housing companies are likely to expect debt to decline, albeit less than last. But they are not expected to go down to zero, as there will always be tenants who do not pay.

Property bubble 2016 - is there a risk?

In 2016, demand for real estate as an investment and retirement provision will continue to be high. In a few years, this may well reach a critical phase, threatening the financial and real estate markets with bubbles whose bursting would cause major economic damage. Nevertheless, in this country, no real estate bubble as in Spain or the United States must be feared. Because the overall higher prices on the real estate market in Germany are offset by the very low interest rates and the rising income of the builders - accordingly, housing in Germany may not remain cheap, but affordable.

Image 1: 75133090 - housing © photo 5000
Picture 2: Word graphic
Picture 3: 88730164 - Front view of a businessman offering you to sign a document or © Gajus
Image 4: 97870953 - Real estate agent © Jakub Jirsák
Picture 5: Word text field


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