What has happened? Old housing in Germany is becoming cheaper. This is because buyers are demanding discounts to offset rising upgrade costs. The latter are necessary to comply with stricter energy efficiency regulations.
Details. In October 2023, prices for existing properties fell to their lowest level since the first half of 2021, down 7.7% from a year earlier. However, the number of newly built homes rose for the third month in a row, up 1.6%, according to a survey by Berlin-based property financing platform Europace.
Background. The discrepancy reflects the impact of new environmental regulations that require major renovations of existing buildings. Higher material costs increase these costs and cause buyers to seek discounts. The gap also suggests interest rates are playing less of a role than earlier this year, when prices fell across the board.
Quote. ““We see a cautiously normalizing market with slightly better general conditions,” Europace co-Chief Executive Officer Stefan Münter said in a statement on Thursday.
Source: BNN Bloomberg