Posted at 18.03.2020 | | in News, Uncategorized
THE REAL ESTATE MARKET IN TIME OF UNCERTAINTY
Advice for sellers
Practically all assets except real estate values have fallen massively. The economic consequences are not yet foreseeable. People are losing their jobs, entire industries are repositioning themselves. Globalization is questioned and many things change in everyday life for all of us.
We have never experienced such a crisis. Right now it is important for you as a property owner to keep a cool head and plan the future. I am sure that we will not plunge into a global depression like 1929. The times are completely different. Governments are strongly networked and intervene intensively in the economic cycle to avert the worst. But the recession will be with us for longer.
If you’re wondering what to do as a property owner now, here is my advice:
Due to the global economic recession, a lot of people will lose their jobs. There will be significant redistribution of assets. That means fewer and fewer people will be able to buy real estate. Many will have to keep renting or sell their apartment or house quickly because they can no longer pay the installments. Many people will have less access to assets.
If you can sell an apartment or a house at these historically very high purchase prices, you should do so now. We continue to achieve very high purchase prices for real estate. Especially single-family houses in Brandenburg, vacant apartments in Berlin, Leipzig and Magdeburg or new buildings in Berlin that are rented for market rent are in demand. None of us know how long that will last. But I don’t think we will have any further significant price increases in the future. Read the recent recessions and take a close look at property values. You will find that real estate has remained stable but has not increased in value.
That means: whether you sell now or in a few years – you get the same price. So you should sell now, because waiting is not worth it. Quite the opposite, if we are all wrong and property values fall as well, then it is time to sell – more urgent than ever.
We not only advise private sellers but also work very closely with international investors. Practically everyone has been selling German real estate for around 12-18 months. Why should the professionals in the industry all be wrong? On the contrary. From today’s perspective, they were already right.
Take the opportunity and secure liquidity as a private individual. Do that now and don’t trust prices going up. You will see that in the coming months and years you will need cash for your life and that of your relatives. Opportunities will open up and it would be a shame if you couldn’t use them. The way we see it, the zenith for residential property prices has been reached or already exceeded. So take advantage of the head start that you have as a property owner and sell as long as the banks are still financing and customers want to own their homes.
Another key aspect for the Berlin location is the rental cover. Even if it is likely to go to trial, other policy interventions will be undertaken to cap rents. 80% of Berlin citizen are tenants and they choose politicians who promise cheap rents. No matter the consequences for the economy. So sell your property better empty than rented and don’t wait too long.
At the end of the year, we expect a conversion ban on apartment buildings. This means that apartment buildings can no longer be converted into condominiums. Many apartment buildings that are still traded at high prices are falling in price. We have been able to observe this for a few months now. If you are the owner or heir of such a house, you should now convert it and sell the house quickly.
If you have specific questions, please contact us and make an appointment with us.