The Deutsche Anlage-Immobilien Verbund (DAVE) is observing increasing pressure on the investment market. On the one hand, sellers are asking themselves whether they have missed the right time to sell. On the other hand, portfolio holders are unsure how the follow-up conditions will develop when extending an existing mortgage.
According to the DAVE, rising interest rates, inflation and the uncertainties caused by the war in Ukraine are leading to higher equity requirements from banks and causing them to take a closer look. Among other things, they are increasingly examining the mortgage lending value. This indicates the amount the bank would receive in the event of a foreclosure or sale of the property. If the mortgage lending value is too high, financing will no longer be granted due to the increased risk.
As a result, it is now only worthwhile for banks to grant a loan for properties that can be used in the long term and are sustainable. Their prices are likely to be higher and buyers can probably afford higher loan installments than buyers of existing properties. "Properties that no longer meet the current top requirements in terms of features and location are therefore the losers. Prices are falling here," explains Gerhard Alles, Schürrer & Fleischer Immobilien. According to Axel Quester of Armin Quester Immobilien, there is "a division of the market into the still high-priced segment and falling values for properties that are no longer marketable".
Source and further information: dave-immobilienverbund.de
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