still benefiting from low interest rates in 2019
The European Central Bank (ECB) has ended its government bond purchase program. With the stated aim of stimulating the European economy and helping indebted countries out of the crisis, the ECB launched its controversial government bond purchase program in 2015. This program expired at the turn of the year. Existing bonds will be renewed, but no new bonds will be purchased. Although bond purchases and low interest rates do not directly influence each other, the program was, in a sense, an additional measure to the low key interest rate. As a result, the purchase of government bonds guaranteed a low key interest rate. It remains to be seen how the key interest rate will develop after the government bond purchase program ends.
ECB President Mario Draghi's term of office is coming to an end
ECB President Mario Draghi's term of office ends in fall 2019, which could have an impact on the real estate market, as experts believe that key interest rates are likely to rise after the change of presidency. However, the penalty interest rate for banks that deposit their money with the ECB could be reduced initially.
The inflation rate has risen
Higher inflation does not sound desirable at first, but ECB President Mario Draghi warns of falling prices. And not without reason: many people could postpone purchases because they would speculate on lower prices in the future. However, because this would be disastrous for the economy, the ECB set itself the goal of raising the inflation rate to just under 2 percent. In Germany, the inflation rate was very low at 0.5 percent when the low interest rate policy began in 2016. In 2017, it jumped to 1.8 percent and currently stands at 1.9 percent.
Interest rates will rise only slowly
According to a survey by the Reuters news agency, economists expect interest rates to rise in the second half of the year. However, even after Draghi's term of office, the increase is likely to be slow and moderate. Therefore, no significant impact on the real estate market is expected, at least for 2019. Those who sell their property this year can therefore still benefit from low interest rates and have a choice of many solvent buyers.
Would you like to benefit from low interest rates and are considering selling your house in 2019? We would be happy to advise you without obligation.
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