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The property market may no longer be in crisis, but it remains in flux. In a recent interview with Handelsblatt, Stefan Münter, co-CEO of Europace, part of the Hypoport Group, delivered a clear message to Germany’s hesitant homebuyers and investors: stop waiting for rates or prices to fall. “Anyone who has found a suitable property and can afford it should go for it,” said Münter. The idea that better conditions are just around the corner, he warns, is wishful thinking.
As Germany’s largest digital platform for residential real estate financing, Europace connects brokers, banks, and customers in a centralised system that processes billions of euros in financing each year. The platform provides a real-time window into lending behaviour and shifts in borrower sentiment—making its data particularly revealing.
March brought an unexpected rebound in residential financing volumes, according to Europace data. Despite higher construction loan rates, mortgage volumes surged—in some segments by as much as 140%. “Many prospective customers have apparently realised that interest rates do not always just go down,” said Münter. Europace does not see this as merely a forward pull from would-be buyers. "Transaction volumes have returned to normal levels but have not dropped below them," he added, suggesting new buyers are entering the market.
Tight housing supply, rising rents, demographics
The main driver: affordability has improved since the 2022 slump. While mortgage rates have edged up again, the essential pressure points in the housing market remain unchanged. Housing supply is tight, rents are rising, and demographic factors—including the exodus of baby boomers from the workforce and the shortage of skilled labour—are reinforcing demand.
Despite geopolitical noise, including renewed tariff threats from the Trump presidency and signs of global economic slowdown, Münter remains confident in the resilience of the market. “Among the typical buyer group—well-educated people aged 25 to 45—an economic downturn is likely to have less of an impact on the unemployment rate than it did in the 1990s or 2000s.”
Financing remains broadly available. Contrary to fears, Europace has not observed any surge in loan rejections due to rate sensitivity. Even in the area of follow-up financing, where homeowners are coming off low fixed-rate deals, the situation is under control. Many have already repaid significant capital and are now refinancing smaller sums at manageable cost.
If anything, Münter sees upside pressure on prices resuming before long. “Prices will continue to rise due to the pressure on the rental market,” he said, projecting modest increases through 2025. A significant expansion of housing supply is unlikely before 2028. The pipeline is still thin, and upcoming infrastructure projects are likely to divert scarce labour and materials away from residential construction.
Only poor-quality housing now likely to sell at deep discounts
For investors, this means relying on falling prices is increasingly untenable. Sellers, meanwhile, may want to offload underperforming rental assets—but only if the ten-year speculation window has closed. “Rental yields are often very low after the increases in value of recent years,” said Münter. Selling now, he argues, is both financially sound and socially useful: it puts more units into the hands of owner-occupiers.
Buyers should also not expect the return of deep discounts. The buyers' market seen briefly in 2022 has evaporated, except in energy-inefficient stock. According to Europace data, only 15% to 20% of listings see their price adjusted downward—and even then, the final sale price deviates by just 3% from the last listing.
In the rental market, the outlook is even more constrained. Rents are expected to continue rising—and may accelerate. Indexed leases and inflation-linked adjustments are making renting costlier, and Münter expects no near-term relief.
“Whether there is a shortage of 300,000 or 400,000 new homes each year doesn't really matter. We won't be reaching these levels of new construction anytime soon—and everyone in the industry knows it,” he said. The overall tenor of his message: investors waiting for a second housing crash may instead find themselves priced out by renters desperate to buy.