In spring of this year, mere weeks into the coronavirus pandemic, many in Germany still believed that condominium prices would deteriorate, whereas few people still think so now. According to a YourGov poll conducted in October, only 29 percent of the German population believe that selling prices for apartments will soften in the wake of the crisis. In a similar poll done in May, roughly one in two respondents still held the opinion that prices would follow a negative trend (source: www.handelsblatt.com).
By contrast, a growing number of people now feel that the coronavirus pandemic could actually spur further price growth. Among the participants of the October poll, 34 percent assume that the crisis has a positive influence on condominium prices. Apparently, the standing of residential real estate as a safe-haven investment has further improved, and convinced many that homes will appreciate even faster (source: www.asscompact.de).
For potential condominium buyers, this means it might be pointless to wait further for price discounts. Indeed, if selling prices were to keep going up, and many assume they will, you might end up paying more the longer you hesitate. This is all the more true since interest on mortgage loans remain on a historically low level for the time being – the effective annual interest rate on mortgage loans with a fixed-interest period of ten years averaged around 0.75 percent in October (source: www.interhyp.de).
Just as interesting about the aforementioned YouGov poll are the responses on the subject of condominium buyer preferences. It appears the realisation that condominium prices are unlikely to decline has prompted a shift in search behaviour. Just 18 percent of the respondents still claimed to be holding out for lower prices in the October poll, down from 40 percent of the respondents who had considered this important in the analogous poll in May (source: www.homeday.de).
On top of that, 35 percent of the respondents of the October poll stated that they are looking for larger residential properties now. This is not to say, however, that the house in the countryside tops everyone’s list. While as many as 31 percent still craved a house in the country in May, the number was down to just 21 percent in the October poll.
Even maintaining a greater distance to the neighbours has lost in significance for Germans since spring. During the May poll, 32 percent had expressed such a desire, whereas less than half as many, 15 percent, still felt this way in October. It appears having an apartment in the city does not seem to have lost its appeal during the crisis.