No, every era has or had its challenges. Knowing all the factors that make a sale easier and more secure is still helpful today.
In view of rising interest rates, potential homebuyers may be wondering whether now is a good time to buy or rent. When comparing renting and buying an apartment, there are several aspects to consider. In this guide, we highlight the possible trends in the real estate market that can help you decide whether now is the right time to buy or rent a property.
The housing market in 2023 is likely to be characterized by high interest rates and high rents. This means that the decision between renting and buying a property will be more difficult than ever before.
Nevertheless, there will continue to be a solid mix of rental and purchase options in Germany. For those who are able to secure financing despite rising interest rates, buying an apartment or house could still be an option. However, due to high interest rates and rents, renting may be the only viable option for many people.
Several factors play a role in deciding whether to buy or rent. It is particularly important to bear in mind that both interest rates and rents are cyclical, which means that even if they are high now, they could fall in the future.
These factors should be taken into account when deciding whether to buy or rent a house or apartment:
1. Rental trends: Rents are rising due to high demand
As demand for housing continues to rise, rental prices are also increasing. This is due to a combination of factors, including high interest rates and limited availability of housing. More specifically, high interest rates make it more expensive for landlords to borrow money for real estate investments, which in turn drives up rental costs as landlords try to offset the increased cost of borrowing. This can result in tenants no longer being able to afford the higher rents and having to look for other apartments, the result is a vicious circle: greater demand for little (affordable) housing and landlords who can afford to raise rents due to demand.
2. Kauf-Tendenzen: Wenige Käufer lassen Kaufpreise (wieder) sinken
With borrowing costs rising due to high construction interest rates, the decision to buy or rent a property is becoming almost impossible for many people. Even a slight increase in interest rates can add hundreds of dollars to monthly payments. Some estate agents are therefore already talking about a possible trend reversal, as the pool of potential buyers who can afford or want to buy a property is becoming smaller and smaller. In the medium and long term, this will benefit potential buyers, as lower demand will lead to lower purchase prices.
3. Die langfristige Prognose
In the long term, performance on the German real estate market will be determined primarily by financial and demographic factors in the respective region. According to a study conducted by Postbank last year, investing in real estate in a popular location and residential area is likely to remain the most advantageous choice.
4. Wohnmodell und Lebensmodell sollten vereinbar sein
Whether you should buy or rent depends on your individual circumstances and financial goals. Ultimately, it is important to weigh up all your options and ensure that the decision you make best suits your financial requirements and lifestyle.
Buying has obvious advantages, such as building equity, but also some disadvantages, such as higher closing costs and maintenance expenses. On the other hand, if you want to remain flexible and mobile, or are just starting to build equity, it may be better to opt for an affordable rental.
Ultimately, however, the decision between renting and buying a property is always influenced by emotions; some aspects may be more favorable for renters, others for homeowners.
Buy or rent? What suits your situation best?
Let our experienced real estate agents advise you and find out what options you have when it comes to buying or renting a house or apartment, based on current market conditions and your budget. We will assign you a personal contact who will discuss all options, wishes, and ideas with you and see them through to completion. Just get in touch with us!