Buyers Prepared to Accept Smaller Flats
For many Germans, homeownership is a long-cherished dream which more than ever appears to be within reach because of the currently low mortgage rates. However, housing prices are going up in many places in Germany, especially in coveted residential locations in metropolises and major cities. In order to make their dream come true nonetheless, buyers are increasingly willing to compromise. A recent survey that the Immobilienscout 24 real estate portal and mortgage broker Interhyp conducted among around 2,000 leads showed that buyers are willing to accept either a smaller footprint or an inferior location to compensate for rising prices. The survey also revealed that owner-occupiers and buy-to-let investors follow different strategies.
Strategies of Owner-Occupiers vs. those of Buy-to-Let Investors
If you buy property with an eye to owner-occupancy, you need not worry about letting it or selling it at a profit. If you plan to let or sell, however, location is of the essence. This explains why more than one in three owner-occupiers (34 percent) is willing to compromise by choosing a more affordable location. Almost as many (28 percent) owner-occupiers would be content with a smaller home. One fifth of all leads delay their decision to buy in the hope that prices will come back down.
Condominium acquisitions by buy-to-let investors are subject to rather different requirements. Compromising is not an option if you have to make your residential units attractive for tenant leads. Accordingly, only 22 percent of the private investors would be prepared to buy a more affordable apartment at the expense of locational quality. Then again, 32 percent will settle for smaller apartments. But they do so for a reason, following a manifest recent trend: Young families bent on living in good inner-city neighbourhoods despite high prices will make do with less floor space.
Floor Area Subject to Converse Trend
The ongoing rush to the big cities, which is causing many people to reconsider their aspirations as far as apartment size goes, has for some years coincided with a demonstrable trend toward more residential floor area per capita. At present, the average footprint per person is 41 square metres in Germany. The BBSR Federal Institute for Research on Building, Urban Affairs and Spatial Development expects the figure to have risen to 47 square metres by 2030. Compared to other countries, this seems like a vast amount of space. In metropolises like Tokyo, for example, residents have an average of only 15 square metres to themselves.