The Fed steered monetary policy cautiously at its last meeting, while the ECB is open to interest rate cuts in June, which many market participants are hoping for. Do you expect a quick recovery if these interest rate cuts happen?

Long-term financing interest, such as B. for 10-year real estate loans already reflect expected developments. A previous cut in financing rates in December 2023 due to expected key rate adjustments had little impact on interest rates. Although inflation is more favorable than forecast, a further slight reduction in interest rates could occur, but more gradually. Nevertheless, no abrupt improvement in the financing situation on the real estate market is expected. However, the rising new contract rents and the new special depreciation are likely to stimulate transaction activity again.

Many properties currently remain on the market for a long time, which gives buyers room to negotiate. How long is this window expected to remain open?

It can be assumed that this window of opportunity will close relatively quickly. The decline in housing construction is exacerbating the shortage of living space, exacerbated by strong immigration to large cities, including urgently needed international skilled workers. As new contract rents rise and people get used to the current interest rate level, the demand for properties to buy will increase again, which increases competition for real estate. There are currently hardly any price discounts, especially in metropolitan areas with a good energy balance. Only properties in need of renovation in remote areas could continue to represent a buyer’s market.

In 2023, condominium prices in the seven top metropolises fell by an average of 5.8 percent, according to data from the Federal Statistical Office – the largest decline in around 60 years. How quickly could prices recover and in which cities could this happen particularly quickly?

Housing prices are expected to rise again this year, although not as sharply as in the 2010s. Due to the DIW’s forecast for only 177,000 new apartments in 2025 with significantly higher demand, new contract rents are rising rapidly, from 4 percent in 2020 to now 6 percent annually. This makes real estate more attractive, especially since lower interest rates are expected in the long term. However, local demand, determined by household numbers and income development, is crucial for price development. Large cities such as Berlin and Munich, where service companies are primarily active and income growth is more dynamic than in the industrial sector, are expected to grow particularly strongly.

People who purchased a property around ten years ago were able to obtain financing at significantly lower interest rates. JPMorgan boss Jamie Dimon recently commented on the long-term possibility of significantly higher interest rates. Should property buyers now speculate on falling interest rates?

Short-term interest rate forecasts are always challenging as they depend heavily on expectations about inflation developments, short-term interest rates and the general economic situation. However, a decline in interest rates is expected in the long term as demographic developments in industrialized countries, particularly increasing life expectancy, increase the savings rate. More savings means more supply on the money market and falling interest rates. However, this prospect does not benefit immediate investors or homebuyers. However, partial financing with a shorter interest rate fixation could be used to benefit from this development, taking into account possible risks, e.g. B. geopolitical uncertainties.