Homeownership has been gaining in importance in Germany for years. As an investment in one's own future, buying a house is becoming a preferred alternative to leasing for more and more people; As our current housing market forecast shows, the demand for living space far exceeds construction activity in Germany.
You may be wondering whether this is the right time for you to buy a house and thus usher in a new chapter in your life. Have you thought about what your future housing needs would look like if, for example, you wanted to start a family and have children?
The dream of owning your own four walls often turns out to be a challenging project that needs to be thought through with all its risks in order not to be negatively surprised in the end. In the following article from Engel & Völkers Germany, we will inform you about some factors that can influence the right time to buy your home.
Whether you are retiring or starting a family: Buying a house in Germany always entails a certain local bond, which living for rent does not bring with it to such a large extent. Therefore, the most important questions you should ask yourself before taking this big step are: Should my new place of residence also be the center of my life in the long term? Do I want my children to grow up here and am I satisfied with my current job? It is also decisive whether you, as a young buyer, want to exchange your flexibility and mobility for a permanent residence. However, if you are lucky enough to have already found your dream job and now want to devote yourself to family planning, nothing stands in the way of buying your house, especially since it is a safe investment for the future, which often increases in its value.
If you are about to retire or want to make provisions for it, the following also applies in this case: Your personal situation is decisive. There is hardly a better form of capital investment than old-age security, and if you have children and even grandchildren, you are investing in the future of your descendants in this way. If you decide to move to a new and unknown city, it is also helpful to rely on the help of local real estate agents who will support and advise you in your property search. Below you will also find out what you should consider financially before buying a home.
As you can already imagine, the question of the financial viability of buying a home has high priority. If you have to pay more or the same amount monthly for a rental apartment in the metropolises of Germany, in which purchase and rental prices have been rising continuously for years, than for the repayment and the mortgage interest on your new home outside of these cities, the hurdle of the adventure of buying a house seems easier to overcome. After all, you are already earning the rent, but you only remain the user of an apartment and are not the owner. The only question is, will you find the right property and if so, how expensive will it be to buy and how do you finance it?
If you ideally already have an equity of 20 or even 30 percent of the purchase price, have a steady, well-paid job or are self-employed and your income remains stable for several years, it is worth investing in your home purchase. If you are also in the fortunate position of starting your project with a low interest rate and can also expect government grants such as KfW loans or child benefit, it is only advantageous to choose your own home.
Nevertheless, a current ideal case can become a worst-case scenario, an uncontrolled risk case. May it be the loss of a job, illness, incapacity for work for other reasons, or a long-lasting general crisis such as the corona pandemic; it is advisable to also think about a possible risk with wise precaution. Appropriate security instruments for your project would be, for example, life insurance, term life insurance, occupational disability insurance and, if you are a perfectionist, a stock fund or a building society loan as a safety cushion to repay your mortgage. With all considerations as to whether it is worth buying your own town house or an idyllic country estate in Germany, the fact that real estate is one of the safest and most valuable forms of investment can make your decision easier. If you want to find out more about financing and buying a house, take a look at the Engel & Völkers Germany blog.
It doesn't matter whether you decide to buy a detached single-family house, a terraced house or an apartment building: Basically, the question of when is the right time to implement this project can only be answered with consideration of your individual starting point. Our real estate agents from Engel & Völkers Germany support you in determining the right property for you and help you to make the right decision in this important matter. Contact us and let us advise you.