An economic crisis in Germany is not yet foreseeable. Minor consequences of the corona pandemic include rising prices in various areas in summer 2021 or a slight decline in economic strength. However, this is not a drama compared to the economic crisis of 2008 – so far. There are currently some bubbles forming that need to be taken into account – this is where the bigger problems lie. An example: real estate.
Real estate under scrutiny
Real estate prices have risen significantly in recent years. There are different statistics that signal different range. The differences are, on the one hand, of a statistical nature (who was surveyed, in which period, in which region) and also of a methodological nature: Are the offer prices used or reports from various broker organizations about actual prices?
Regardless: Real estate has become more expensive, among other things, because interest rates have been extremely low for many years. This has led to a credit glut that will need to be serviced in the coming years. The danger lurks in interest rate policy. If interest rates rise in the coming years, then a) fewer new buyers will be expected and b) old loans will also have to be extended at higher conditions. Real estate is considered a good protection against inflation – but you should know that the market is slightly overvalued given these conditions. The core danger, however, comes from politics itself: the energy regulations are being readjusted. It is to be expected that, for example, there will be a nationwide obligation to equip roofs with solar panels. In addition, the property tax is being renewed – and the property transfer tax is also at stake.
In short: If you own real estate, this investment is probably still a good investment. If you want to invest in real estate, there may be a price slide in the coming years from 2024. You should take this into account when it comes to economic crisis protection.