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Real estate. Forecasts on the real estate markets vary widely. Is the crash coming? Oder will the boom continue now more than ever? Michael Reiss, managing partner of Sotheby's International Realty in Munich, dares to give an outlook.
"I have of course also read the many comments of the last few weeks. Und understands very well that potential buyers and sellers on the real estate market are irritated. Because opinions differ more than ever before", Michael Reiss reflects.
On one side of the scale, the analyst firm Empirica, for example, is expecting a drop in purchase prices for residential real estate of up to 25 percent in the coming months. On the other hand, real estate is propagated as the real crisis currency and safe haven, whose value will continue to rise, especially in difficult times.
"I myself don't think much of such generalisations, but rather look at the market situation quite soberly", sagt Reiss. The starting point for his considerations are the analyses of economists who are now forecasting the sharpest economic slump in Europe since Zweiten Weltkrieg. "In times of recession, fear and the threat of unemployment, fewer people than before will probably dare to run up high levels of debt to buy property. Demand is therefore likely to drop temporarily."
However, according to the expert, this would only have a stronger impact on prices if there were suddenly much more supply on the market. "I do not see that at all yet. But of course there were many, especially in the middle range between 500,000 and 1.5 million euros, who have made their financing very tight in recent years. They only pay interest and suspend repayment. If the economic crisis lasts longer, things could get tight for them. Then forced sales with high discounts are conceivable in the short term."
In the luxury segment, however, the starting situation is quite different. "Customers there are generally conservative in terms of assets. Real estate ownership serves primarily to secure long-term wealth. This solvent clientele is not forced to sell and probably won't do so. I therefore do not expect to see any major price declines in diesem Segment," Reiss is convinced.
Once the dust settles - "we all hope that with the development of a vaccine the economy will return to its growth path in 2021" - the cards will be reshuffled. "In the commercial sector - especially for offices - things could become more difficult in the future, given the new, clear trend towards the home office," says the professional. He points to two conflicting factors in residential real estate. The fact that higher rents are difficult to enforce and additional government levies are threatening is weighing on the market. However, the persistently low interest rate level supports him. "I could therefore imagine that the ten-year interest-driven boom will now be followed by a decade of 'New Realism'. With price developments that tend to be stable, but clearly differentiated in the various market segments."
On balance that is not at all such a bad perspective. "In fact, supply and demand have not been in harmony for quite some time now bei Immobilien The providers simply had too high price expectations. And they hoped to sell their properties far above the valuation of professionals. The marketing times increased accordingly. This could now change."
Michael Reiss now advises property owners not to overdo their price expectations. "And potential buyers who are tempted to test margins downwards should not hope to make the bargain of a lifetime. More realistic is that they get the chance to buy their dream property at a reasonable price. Und that would be something." ®
Munich | Sotheby's International Realty Michael Reiss; 49 (89) 744 24 18 90