Low interest rates over the years have made real estate financing cheap. This is another reason why the number of acquisitions has been declining for a long time. Experts now expect a trend reversal.
Despite the weak economy and sharp increases in interest rates, fewer properties have been seized in Germany. According to data published on Monday by the specialist publishing house Argetra, procedures for 6,248 facilities were opened in the first half of the year.
In the same period last year, there were 6,432 houses, apartments and land. However, the market value of the property increased from 1.42 to 1.66 billion euros due to higher prices. In the first half of the year, many objects with a market value of more than one million euros were put under the hammer, especially in Berlin.
Argetry experts, who have analyzed acquisition dates in nearly 500 district courts in Germany, expect more people to seize properties soon.
The number of foreclosures in Germany has been falling for years. The reason for this is a long-standing good economy and low interest rates, which keep the interest burden on debtors low and fuel demand for real estate. In addition, due to the krone pandemic, banks offered borrowers to defer payments instead of terminating loans and initiating enforcement.
Many more private bankruptcies were feared
However, Argetry experts believe that the situation is changing. “A weak economy, declining purchasing power and high inflation, in particular soaring energy and rental prices, will lead to a significant increase in private bankruptcies this year,” they write. The number of executions is likely to increase significantly in the coming year as processing times are long and the weak economy only has a delayed impact.
There would also be higher interest rates. Many people did not manage to pay off the entire property loan at the agreed fixed interest rate during the term of the contract. “Subsequent financing through a new loan will then be much more expensive. Many home builders can get overwhelmed. ” Interest rates have more than tripled since January, from 0.8 percent to around 3 percent recently. Recently, researchers at the German Institute for Economic Research warned of more acquisitions due to rising interest rates.
Acquisition items are considered desirable as there are hardly any inexpensive real estate in the normal market. According to Argetra, only about half of the foreclosure proceedings initiated end up in court. The remaining properties will be sold earlier. According to Argetry, in particular single and two-family houses and a condominium have been seized. On average, 15 out of 100,000 households in Germany were affected in the first half of the year. North Rhine-Westphalia has been at the forefront of exclusions for many years. (dpa)