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We will attempt an update:
Our update on the real estate market, as of April 2022, cannot do without a look at current geopolitical circumstances,
because just when the Corona crisis seemed to be largely overcome, suddenly a war broke out in Ukraine.
The question is:
Is the German real estate market resilient enough in the face of the Ukraine war as it was previously under the pandemic?
Both crises in any case indicate diverse impacts that could be decisive for the development.
1) Properties further continue to gain in importance:
Properties further continue to gain in importance. The current uncertainty through the events described could increase demand for properties rather than slow them down. Properties insofar remains furthermore the most important tangible asset and promises value stability.
2) The interest rates are rising:
The interest rates are rising in all likelihood, because some of the financial institutions apparently are already anticipating the ECB to tighten interest rates. In view of high and rising property prices, equity requirements for buyers now also are increasing parallel. With a view to the possibly increasing key interest rate, cash reserves could be now also increasingly activated, so alongside the motto: those who can buy, buy.
3) The building cost are rising.
Building cost are rising very strongly already now. The shortages of material regarding supply chains and lost outputs are parameters, in which case building costs and building prices are likely to rise forward. Rising building costs are generally pass through to the consumers.
How the war in Ukraine and the imposition of economic sanctions will affect the property market, unfortunately for the time being cannot estimated at present not specific enough.
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