Is the corona crisis also putting a damper on the real estate market? Many potential buyers and builders had hoped for it. But so far it does not look like the situation will ease. This is also shown by a new study.
According to experts, the real estate boom in Germany will continue to defy the corona crisis. A large part of the drivers remain intact despite the pandemic, according to a forecast by the Hamburg Gewos Institute for Urban, Regional and Housing Research. "These include the high demand for housing due to demographics, the lack of building land and properties, as well as the low interest rate level paired with a lack of investment alternatives in uncertain times".
The partly apocalyptic predictions in lockdown would not have come true, said Gewos expert Sebastian Wunsch. Specifically, the institute is forecasting a slight increase in sales in the entire real estate market to a good 290 billion euros this year. That is an increase of 0.5 percent. This would once again exceed the record year 2019. Responsible for this are primarily the income from residential real estate, which should climb by 5.2 percent to a good 215.5 billion euros.
Demand remains high
The number of purchases of homes, condominiums, apartment buildings and residential building land, on the other hand, could fall slightly, the paper says. "Housing is a basic need and especially the demand for owner-occupied residential property is still high," said Wunsch. This was confirmed by data on price developments from the supply market and from expert committees on realized purchase prices over the course of the year. There are also catch-up effects in transactions after a dip in the spring.
So far, the Corona crisis has barely affected the price boom for apartments and houses – despite the slump in the economy, rising unemployment and record-breaking short-time work. According to calculations by the Federal Statistical Office, the price of residential real estate rose by an average of 1.4 percent in the second quarter compared to the first quarter of the year. According to the first estimate, there was an increase of 5.6 percent over the same period last year. According to the statisticians, the growth was in line with the previous quarters.
Real estate prices had already risen sharply at the beginning of the year. The corona pandemic could, however, have a delayed effect on the real estate market, which usually lags behind the economy. "If, as a result of the crisis, there were permanently lower labor demand in Germany, this would have an impact on wage developments and thus in the medium term also on housing demand," says the Gewos study. It is also questionable whether the pandemic and the lockdown resulted in permanent changes in living preferences – for example for more space, more interest in owner-occupied residential property, living in the countryside or a higher priority for balconies or gardens.
.