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Build or buy a house in Corona times, should you do it or better not do it?

Understandably, the Corona crisis has also had an impact on the real estate market. Many people are now asking the following questions: How are real estate prices developing? Like the construction interest or financing interest? Does a new building make sense? Long-term forecasts are not always possible due to the many uncertainties. Classic construction or real estate financing is also feasible in times of a global pandemic. Our team of consultants is always there for you for these and other questions.

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Buy in the crisis

Even under these circumstances, buying a property can be just the right thing for you. Right now you may wish for more freedom in your own living space, your own garden or a secure facility. Then an intensive analysis and serious advice for your financing options are very important. With your own individual solution, tailored to your situation, a property can now become an investment in your quality of life and assets.


escape to safety

“The Corona crisis is currently overshadowing all other real estate issues. (...) In the medium term, however, a flight to safety and possibly higher immigration could provide positive impetus.”

Deutsche Bank Research, Outlook on the German Real Estate Market 2020, April 22, 2020


Still, the prices are rising

Contrary to the expectations of many experts, real estate prices have not fallen during the pandemic. So prices are going up as usual.

More or less this applies to all residential real estate. From existing houses, from new buildings to condominiums. No real deviation can be observed. The house price index EPX hedonic gives an insight into the development. This index gives an overview of the actual real estate financing for private customers in Germany and thus the real estate purchase prices paid.


House price index EPX hedonic

The house price index EPX hedonic is based on data from real estate financing for private customers in Germany. The overall index consists of the data from the individual indices for existing and new buildings as well as for condominiums. The EPX was developed in 2005 by the independent Europace platform together with the Federal Office for Building and Regional Planning BBR. The index is calculated monthly. The aim is to show the pure price effect for each period under consideration.

About two months after the Corona measures came into force, the index showed that the overall index for new buildings (single and two-family homes), condominiums and existing houses had risen by 0.7 percent compared to the previous month, for new buildings the increase was 0.89 percent strongest.

The house price index for condominiums is the highest overall, closely followed by new builds. Compared to the same month in the previous year, prices have risen by around 11 percent overall, including around 12.9 percent for condominiums, around 8.3 percent for new buildings and around 14.2 percent for existing houses.

Only the coming months will show whether the corona crisis will have any effect on house prices.


Concrete gold in Germany

There are a wide variety of opinions among experts, some are convinced that the Corona crisis will cause real estate prices to slide. After a short phase of falling prices, others expect a sharp upswing – a real boom. Real estate in Germany is considered crisis-proof, which may be why it is becoming attractive to more and more private households and investors. A run on real estate then tends to increase prices.

But of course it also applies here that only a careful examination of your personal situation should lead to a purchase decision, regardless of whether it is a new building or the purchase of an existing property.


housing wanted

The price development of the last few years makes it clear once again that the demand for houses and condominiums still exceeds the supply. Our experienced team continuously monitors the market, especially in these times. With objective reviews and analyses, we can show you whether the time is right for you to buy your own home or not. We draw your attention to developments in the real estate market and rents.


Purchase after checkout

No matter what the conditions for a purchase look like. The desire for one's own safe home remains. Anyone who wants to buy or build will sooner or later want to make their wish come true. Only one thing helps here: Kassensturz. Estimate and calculate costs. Interest rates are also important, for example – as a long-term cost factor.

No matter what your conditions for buying a property are, your desire for your own safe home remains. Sooner or later you will want to make your wish come true. Only one thing helps here, put your cards on the table. Estimating and calculating the costs, especially the interest, is important to assess the long-term feasibility of your project.


Your personal life situation is the measure

All assessments by experts for the cheap purchase or construction of an apartment or house ultimately remain only forecasts and predictions based on experience. The desire for your own home does not have to be given up in the Corona crisis.

Analyze your situation openly and critically.

-Check your life situation

-Check your financial situation

-Check secure financing

-Get a second opinion or advice


Building interest after Corona

Banks increased building rates for a short time – some have already announced reductions again. The slight increase in interest rates is partly due to banks' risk assessment. In the current uncertain times, the banks are recalculating their risk, and customers often do not feel the fall in interest rates in the market. Home loans are still relatively cheap.


Will interest rates stay low?

The forecasts of market analysts and experts from banks and institutions could not be more different. Some assume that interest rates will remain low for decades, others say that interest rates will rise due to national debt and the economic crisis. A closer look reveals that only a slight increase in interest rates, if any at all, is


Low interest rates will continue to provide support

“Germany can benefit from several developments in terms of residential real estate even in the Corona crisis. For one thing, mortgage interest rates are likely to remain at a very low level for many years to come. This means that it is still attractive for prospective buyers to finance their own home or to invest in “asset class” real estate and to earn regular income as a landlord.”

Tagesschau.de/Wirtschaft, 05/26/2020


Long fixed interest rate as a feature

The conditions for long-term fixed interest rates are currently stable, so it can be assumed that the markets are assuming that interest rates will remain low in the long term. Therefore, according to some experts, buying a house is cheaper than ever. Because of the low interest rates, many can therefore finance a house or an apartment – or even build it themselves.

Building your own home – Yes, of course

It doesn't matter whether you want a certain energy standard, a special floor plan for your special life situation, your dream place to live. If you plan and build your house yourself, you benefit from low interest rates and many advantages when it comes to financing. Receiving subsidies for energy-efficient construction can be particularly attractive.

There is really nothing wrong with planning steps in the current situation, setting out your financing framework, obtaining information on financing, looking for land and property developers - everything is possible with a possible slight restriction. Before you start directly with a construction project, you should first go deep into yourself and take precautionary measures. The construction process is delayed if the approval process is prolonged due to Corona, craftsmen are not allowed to enter the country and problems arise when procuring materials.


InVertas advises you in Corona times

In the Corona crisis and afterwards, only comprehensive and constant observation of the market will help you. All influencing factors must be taken into account. Whether supply, demand, prices, everything that can influence the purchase of real estate or new construction must be kept in mind. From viewing opportunities to approval practice with the authorities. And last but not least: Check all financing options and subsidies, keep in constant contact with the banks and keep an eye on the individual loan conditions.

You have to collect all the information, analyze it, evaluate it and take your personal situation into account. Our consulting team will be happy to support you.


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