When will the interest rate turnaround come?
At least not this year – as many market participants had hoped. At least the European Central Bank left key interest rates at their current level of 4.5% at the end of October and for the first time since July 2022. Against the background of declining inflation and a simultaneously weak economy, economists are now assuming a phase of stable interest rates. After more than 18 months of uncertainty, this is an initial orientation that can offer project developers and investors a little more security for their planning. Globally stressful factors remain the ongoing war in Ukraine and the Middle East conflict, the expansion of which would certainly cause the price of oil to rise further.
So: We can only hope for a reduction in key interest rates in the second half of next year. But perhaps it is precisely this expectation that is already making us notice a significantly improved mood on the real estate market. The enormous need for apartments in Germany will only cause rents to rise in one direction – upwards – for the foreseeable future. That alone makes investing in solid, moderately rented residential complexes interesting again.
“Substance prices starting at around €1,000 per square meter of living space in smaller cities and starting at €2,000 in the capital are definitely worth a look.”
CEO & Managing partner