Expert: The Most Favorable Time in Recent Years to Buy a New Home

Real estate prices are essentially at the level from three years ago, but the movement of all other important indicators, such as inflation, wage growth, and interest rate decline, confirms that buying a new home has not been this favorable in quite a few years, comments Martin Vahter, head of 1Partner Real Estate.

Over the past three years, average salaries have grown steadily at 8-11% annually, and the price increases of goods and services have been even faster. "In relation to incomes and the overall rise in cost of living, real estate with stagnating prices has become much more affordable for buyers compared to a couple of years ago," explains the head of 1Partner Real Estate, who notes that interest rates, which have been at high levels in the meantime, have also come down nicely over the last six months. "In the context of general price increases, borrowing money is probably the only thing that has become noticeably cheaper recently," adds Vahter, referring to Euribor moving toward 2%.

The head of 1Partner Real Estate emphasizes that this situation cannot continue much longer, as all input prices have also increased significantly for real estate developers. "Upward price pressure is also affected by the VAT increase coming in the summer, and rather, new developments coming to market in the future are already more expensive from the start compared to those currently for sale," adds Vahter.

"Despite interest rates that were at noticeably higher levels, no major real estate price decline followed, and in light of the current lower interest rates, pressure for price increases has actually grown instead. Salaries and cost of living will continue to rise this year as well, and in this light, today's loan payment already looks more favorable a year from now," adds Martin Vahter.