That’s why houses will soon be cheaper


Lerato Khumalo

There is a stalemate in the real estate market: buyers cannot afford the high prices, sellers are not willing to budge. That is likely to change soon.

Jörg Utecht is optimistic this Tuesday morning. “The desire for one’s own home is still as great as ever,” says the CEO of the mortgage broker Interhyp in the annual press conference. And there are certainly opportunities to make this a reality despite the continuing high interest rates on mortgages.

The real estate market is currently in a stalemate in which the price expectations of buyers and sellers do not yet match – but that will soon change. “The market is on its way to a new equilibrium,” says Utecht.

Those interested in building or buying can expect prices for houses and apartments to continue to fall in the coming months. The manager cites the increased supply of properties on the relevant portals as one reason. “In recent years we have experienced a seller’s market. There were a few properties that usually attracted a lot of interested parties. That is now changing.”

Buyers now have significantly more room for negotiation and are increasingly successful in getting price reductions. The chance of getting a discount is particularly high for properties that have been advertised for a relatively long time. And you can also get lucky with the interest rates.

“We expect interest rates for ten-year loans to remain within a range of three to four percent in the coming months,” says Utecht. A trend reversal is therefore not in sight; buyers could still take advantage of the fluctuations.

“We recommend that you always stay in close contact with your advisors in order to take advantage of any dips in interest rates.” In the recent past, for example, interest rate differences of 0.7 percentage points have been seen.

According to Interhyp data, the cost of real estate fell sharply in the second half of 2022, especially in large cities. Houses and apartments in Hamburg, Munich and Frankfurt were eight percent cheaper towards the end of the year than in the second quarter. In Berlin and Leipzig, average prices fell by four percent.

Interhyp itself also suffered from the turbulence last year. The volume of loans brokered fell by 15 percent to 29.2 billion euros. The pre-tax profit shrank by 43 percent to 61 million euros. Interhyp did not disclose its net profit. The market share in home financing also fell from 11.8 to 10.9 percent.

The company, which belongs to the Dutch bank ING, actually wanted to grow. The goal is a 20 percent market share by 2028. CFO Hillbrand believes that this is still achievable. “The real estate market will come back,” said CEO Utecht. First, however, Interhyp has cut around 100 jobs. The company currently employs a good 1,600 people.