Why You Should Buy Real Estate Now: All the Reasons
Is now the right time to buy real estate? This article helps you understand why now might be a good opportunity, what advantages and risks exist, and how to best plan your financing.
The most important points at a glance
The real estate market shows signs of stabilization, creating a favorable opportunity for buyers in 2025, particularly due to fallen prices and stabilized construction interest rates.
Buyers benefit from lower prices for existing properties as well as attractive financing options, especially for energy-efficient properties.
Risks such as rising construction costs and potential future interest rate increases should be taken into account when making decisions and budgeting for real estate purchases.
Real estate not only offers the opportunity to live rent-free in retirement but also currently provides many tax advantages as an investment.
Due to the decline in new construction, high demand is guaranteed.
Current market situation: Is now the right time?
The real estate market is currently experiencing an interesting phase. In 2023, property prices for condominiums fell by 8.9%, single-family homes by 11.3%, and multi-family homes by 20.1%. However, since then, prices on real estate portals have risen again, indicating stabilization. These developments have led many potential buyers to wonder if now is the right time to purchase a home.
Construction interest rates have risen since the beginning of 2022 and are now over three percent. However, by the end of 2024, the rates have stabilized, making the current time favorable as the fallen prices make properties more affordable. Experts emphasize that competition among buyers is increasing and market development indicates stabilization. This suggests that now could be a good time for interested buyers to enter the market. A reduction in interest rates could also have further positive effects on the market. The interest rate turnaround could also influence future developments.
Advantages of buying real estate in 2025
In 2025, the real estate market offers several advantages for potential buyers. One of the biggest advantages is the lower prices for existing properties. This makes property acquisition more affordable and provides a good opportunity to enter the market.
Another advantage is the sustainable construction financing, which is often promoted with lower interest rates, especially for energy-efficient properties. This means that buyers benefit not only from lower property prices but also from more favorable financing options.
Moreover, the demand for housing remains high, meaning that achievable rents are higher than ever before. This makes purchasing real estate attractive not only for self-users but also for investors looking to rent out a property to create housing.
The decline in new construction has led to a limited supply of new properties, which keeps prices for existing properties stable or even increases them. This development creates an attractive market situation for investors who wish to benefit from rising rental income in the long term. The combination of high demand and limited supply could lead to further increases in property prices in the future, making the current time particularly attractive for purchases.
Risks in Real Estate Purchase 2025
Despite the many advantages, there are also risks that must be considered when purchasing real estate in 2025. One of the biggest risks is the rising construction costs, which can significantly impact the profitability of real estate investments. This could result in the total costs of a real estate project being higher than originally planned.
Another risk is future interest rate increases, which could significantly raise the financing costs for buyers. Although interest rates are currently stable, there remains the possibility that they may rise again in the future, which would increase the monthly payments for real estate loans. However, interest rate reductions could also play a role.
Additionally, there are stricter legal requirements in the area of climate protection, which can incur additional costs for renovations. These requirements can lead to significant additional expenses, especially for older properties, which must be taken into account in budget planning.
Financing Options and Interest Rate Lock
When purchasing real estate, selecting the right financing options is crucial. It is important to carefully examine the financing possibilities to ensure that the monthly payments fit within the budget. Careful planning of the financing can help avoid financial difficulties.
The follow-up financing should be planned one to three years before the existing loan expires. This allows for securing the best conditions in a timely manner and ensuring a seamless continuation of financing.
A popular financing option is the building savings plan, which offers fixed interest rates that are not affected by future market changes. Choosing the right interest rate lock is also crucial to ensure planning security.
Equity and Budget Planning
Equity plays an important role in real estate purchases. It reduces the loan amount and mitigates the risk of high indebtedness. It is recommended to pay at least the ancillary purchase costs out of pocket. Higher equity generally lowers interest costs and shortens the loan term.
Using more equity leads to lower monthly payments and better affordability. Full financing, where no equity is required, often results in higher interest costs and monthly payments and is only recommended with a high rental yield. Careful budgeting helps determine the maximum possible loan payment.
A financial buffer for unforeseen expenses such as repairs should also be planned.
New Construction vs. Existing Buildings: Which is the Better Choice?
The decision between new construction and existing buildings depends on various factors. New constructions tend to have higher purchase prices, which can complicate financing. Renovation costs for existing properties can vary significantly, depending on the condition and age of the building.
An energy certificate can provide important information about the energy balance of a property and helps estimate operating costs. Often, the best of both worlds can be found in extensively renovated existing properties.
Real estate as an investment
Real estate offers a variety of opportunities as an investment. One of the greatest advantages is the possibility of living rent-free in old age, which can create financial freedom. However, investing in owner-occupied properties may require significant capital in retirement, which is why renting is often more profitable in the long term.
A rented property can provide a continuous source of income. Owners can initially rent out a property and later use it themselves, which supports loan repayment. A property can also be sold to generate funds for retirement savings.
Owning a property offers tax advantages, as costs and interest are deductible. The location of a property plays a crucial role in its value development and rental potential.
Buying through a broker or privately?
The decision of whether to buy through a broker or privately depends on various factors. Working with a real estate agent can significantly reduce time and complex tasks involved in selling a property. A professional broker brings expertise and experience that are essential for the successful marketing of a property.
The commission of a broker usually depends on the sale price and is due upon a successful sale. However, a commission of typically 3.57% of the purchase price is incurred.
This is where we come in: We connect off-market properties directly from developers, eliminating broker fees and potentially enabling better deals.
Checklist for purchasing real estate
A comprehensive checklist for purchasing real estate is essential. Before buying, the location of the property should be thoroughly examined, as it greatly influences future value and quality of life. Important factors to consider before purchasing are:
Employment situation
Family planning
Financial budget
Location
Renovation needs
available funding
total costs
equity
The ancillary costs when purchasing a property, such as property transfer tax, typically amount to 6 to 15 percent of the purchase price. The property transfer tax varies by federal state between 3.5% and 6.5% and can significantly influence the total costs. It is important to consider ancillary costs and modernization costs when planning the budget.
It is advisable to schedule multiple consultation appointments to comprehensively understand all aspects of the property.