Inflation has reached record highs, interest rates are historically low. Building applications are falling drastically, and of the 400,000 homes needed annually, only 100,000 are expected to be completed in 2024. Due to the nevertheless increased interest rate, a broad group of buyers can no longer afford to buy real estate.
NOW is the time for good deals
Purchase prices in Munich rose by 200% in 1975 and 1985.
This with an interest rate averaging 10% and inflation averaging 5%.
Drivers were the demand for housing due to population growth, economic growth, low interest rates (10%!) and the shortage of housing due to regulations.
All these factors are currently present as well, interest rates at only 4% and inflation even higher than interest rates. Historically unique!
What are we saying?
From 1970 to 1985, interest rates were between 7% and 11% and purchase prices tripled. The growth factors today are even more per property.
If you had the chance now to buy again as you did in 1970, would you do it?
Conclusion: You should buy as many properties as you can now. Sustainable locations and the right properties are important!