It is obvious: We are in turbulent times. Interest rates are rising worldwide, the financial markets are tense – and an end to the crisis is not in sight any time soon.
Germany’s economy has also been cooling down considerably since this summer. The ifo Institute states that the high inflation rate is causing the real income of private households and their savings to melt away and reducing purchasing power. So it makes sense that real estate owners are considering selling their property in order to have liquid funds at their disposal. But at the same time, the following question arises: Is now really the right time to sell a property?
The answer of our EDEL real estate experts: Absolutely! There is still time. The fact is: According to the ifo economic forecast for autumn 2022, the gross domestic product will increase by 1.6 % this year and then shrink by 0.3 % next year. The inflation rate will average 8.1% this year and rise to 9.3% next year. A gradual normalisation of the economy is not expected until 2024.
Property owners willing to sell should therefore get down to business if they want to generate liquid funds from the sale of their property in the short term and achieve an appropriate sales price.
Reason: The higher interest rates rise, the more difficult it becomes for potential buyers to meet the financing conditions for the purchase of a property. The consequence: The demand for real estate decreases due to falling purchasing power and the circle of interested buyers will inevitably shrink – which makes the search for the ideal buyer more difficult.
So it is understandable that property owners are uncertain about the sales price that can be set in the current situation. “Now it’s crucial not to fall into blind actionism. Under no circumstances should a sale be rushed and ill-considered – because in the worst case, real estate owners sell their property below value,” emphasises Guy Edelsburg, managing director of EDEL Real Estate and expert for the Berlin real estate market. Therefore, the question of the appropriate selling price must be answered in a well-founded manner: Only an expert on the local real estate market can guarantee a reliable property valuation.
It is therefore more important than ever to have an experienced real estate agent provide expert support throughout the entire sales process: from the property valuation and the decision-making process to the notary appointment – even and especially in times like these.