Anticipated growth in real estate prices, according to the leader of bausparkassen
Bernd Hertweck, the CEO of the Association of Private Building Societies and Wüstenrot Bausparkasse AG, has predicted a moderation in housing prices in Germany for the coming year. In an interview, Hertweck indicated that while the rapid price increases seen in recent years are expected to slow down, the market is likely to remain balanced, easing affordability pressures for buyers.
Hertweck believes that the end of the European Central Bank's (ECB) purchase programs could lead to an increase in risk and inflation, potentially impacting the housing market. Despite this, he does not anticipate a significant drop in prices. Instead, he expects the pace of growth to moderate, offering a degree of relief.
The demand backlog for builders is expected to decrease from one million to 800,000, but Hertweck still considers it to be too high. This high demand could potentially lead to continued pressure on housing prices, even in the face of potential insolvencies in the coming year.
Hertweck also does not rule out the possibility of rising construction interest rates, even with the ECB's zero-interest policy. He expects the normal interest rate without ECB intervention to be up to three percent. Despite this, he does not see an imminent risk of a housing bubble, despite the increased credit demand.
Despite potential slowdowns in individual locations, Hertweck does not expect a significant overall slowdown in the housing market. He believes that there is only a limited potential for a slowdown in residential real estate, with demand for housing remaining high.
In conclusion, while Hertweck predicts a moderation in housing prices in Germany for the coming year, he does not expect a significant drop in prices. Instead, he expects the pace of growth to slow down, offering a degree of relief. However, the high demand backlog for builders and the potential for rising interest rates could continue to put pressure on housing prices.
The finance sector might experience a degree of relief due to the anticipated moderation in housing prices, as predicted by Bernd Hertweck, the CEO of the Association of Private Building Societies and Wüstenrot Bausparkasse AG. Despite the potential increase in demand backlog for builders and the possibility of rising construction interest rates, Hertweck does not expect a significant drop in housing prices, only a slowdown in their growth pace.
