Buying a property is becoming increasingly difficult for many potential buyers. At least that is what the Immowelt Group assumes due to the European Central Bank's (ECB) key interest rate hike and the associated expected increase in construction interest rates. For example, if a family wanted to buy a house in Stuttgart, they would only be able to take out a loan of EUR 322,000 in the third quarter of 2022 in order to maintain a healthy housing cost burden. In the first quarter of 2022, they could still have taken out a loan of 431,000 euros. The affordable loan amount has therefore fallen by 109,000 euros due to the rise in interest rates.
Overall, the Immowelt Group examined developments in 14 major German cities and identified reduced loan amounts in all of them. In addition to Stuttgart, Munich and Frankfurt am Main have also been hit hard: with an interest rate that was still 1.3 percent in the first quarter of 2022 and rose to 3.5 percent in the third quarter of 2022, the affordable loan amount in Munich has shrunk to 318,000 euros, a reduction of 108,000 euros, according to the Immowelt Group. In Frankfurt am Main, the affordable loan amount is now €314,000. This represents a reduction of €106,000 compared to the first quarter of 2022.
The Immowelt Group's figures are examples based on a number of assumptions. For example, the household income of a family was assumed to be the average income of 1.5 full-time earners plus child benefit. Background: The key interest rate was raised to 2% by the ECB at the end of October. The key interest rate is a fixed interest rate at which commercial banks can borrow money from central banks or invest it with them. The key interest rate is raised so that less money is available on the market, making the individual euro worth more and reducing inflation. For consumers, however, this is accompanied by higher interest rates, among other things. This not only affects prospective buyers, but also property owners who need follow-up financing. They now have to pay higher rates for this.
Sources: immowelt-group.com/verbraucherzentrale.de/wavepoint.de
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