Real Estate 2025: Price fluctuations shock tenants and buyers!

Real Estate 2025: Price fluctuations shock tenants and buyers!

A lot is happening in the real estate market in Germany. A recent report shows that condominium prices have fallen slightly, while rents are rising noticeably. According to the Postbank Housing Atlas 2025, prices for existing apartments have fallen by an average of 0.7 percent. At the same time, however, net rents rose by a total of 5.1 percent. This means that the income burden for tenants has increased to 14.1 percent, while buyers only have to spend 18.3 percent of their income on the purchase of real estate, which represents a decrease compared to the previous year Baulinks.

The differences in income burdens are particularly noticeable in large cities. Hamburg (18.4 percentage points) and Munich (18.1 percentage points) recorded particularly high values. In Berlin the difference is 16.1 percentage points. An exciting detail: In the Nordfriesland district, which also includes Sylt, the purchasing burden is the highest in Germany at 53.4 percent of net household income. This development means that in 130 regions less than 15 percent of income is required to purchase a condominium Experts.

The market development at a glance

However, current trends also show positive signs for buyers. After a phase of uncertainty in the residential real estate market, a recovery can be observed. Average asking prices for condominiums in the first half of 2024 were EUR 3,822 per square meter, a decrease of 7.8 percent compared to the peak in 2022. According to Engel & Völkers, the demand for residential real estate has increased and many people are interested in single-family homes or condominiums.

Fortunately, there is also increasing trading activity after the bottom was reached in 2023. Financing conditions have improved as building interest rates fell to just under 3 percent at the beginning of August 2024, more than one percentage point below the previous year's level. This development could lead to buyers taking advantage of attractive offers without getting into competition for real estate, which has often been the case in recent years Baulinks.

The challenges of the market

Despite these positive developments, there are some challenges that buyers and renters should be aware of. Construction activity is declining and the number of new building permits has developed negatively. Energy efficiency is increasingly becoming a crucial quality for real estate, and given rising rents, it is important to keep an eye on long-term wealth creation through home ownership. The experts emphasize that individual income levels, additional costs and the energetic condition of the property are important factors that must be taken into account when considering the purchase Experts.

In conclusion, it can be said that the real estate market in Germany offers many facets. While buyers can benefit from falling prices and improved conditions, tenants face the challenge of rising rents. Anyone who moves in this dynamic landscape as a buyer or tenant must be well informed and keep an eye on current developments.