MUNICH (dpa-AFX) - After two years of crisis for prospective home buyers, the financial sector is reporting the first signs of a cautious revival in the private real estate market. In the first two months of this year, real estate loan commitments to private customers rose again slightly for the first time, according to reports from financing brokers, Bausparkasse Schwäbisch Hall and the Bavarian savings banks. And according to figures from the Bundesbank, almost 14.7 billion euros in interest-linked private housing loans were granted in Germany in January, the highest figure since March 2023.

The rapid rise in lending rates resulted in a slump in real estate lending two years ago. In the first quarter of 2022, there was a short-lived boom in anticipation of the upcoming interest rate hikes, as many home buyers wanted to secure the still favorable interest rates at the time. According to Bundesbank figures, private customers borrowed almost 32.3 billion euros in real estate loans in March 2022. In April 2022, the figure was already more than six billion less and at the beginning of 2023 it was just over 12 billion. The average APR climbed from 1.69% in March 2022 to 4.27% last November. Financial sector hopes for a turnaround

The financial sector is now hoping for a turnaround: "We have seen a significant upturn in the mortgage market since the start of the year," says Jorg Utecht, head of the Munich-based mortgage broker Interhyp. According to Utecht, January 2024 was even the month with the most applications ever in the Group's Direct Channel.

This is because real estate loans have become slightly cheaper again since the peak in November. "From the interest rate peak in November 2023 at more than 4.2 percent for ten-year loans, construction interest rates have fallen to the current 3.55 percent," says Utecht. "Compared to last November, it is currently possible to save several tens of thousands of euros in interest costs over the entire term of the loan." Interhyp assumes that interest rates will remain at a level of around 3.5 percent over the next few months.

Not only are interest rates somewhat more favorable again, but houses and apartments are no longer quite as expensive. Even before the fall in interest rates, real estate prices had already fallen last year. As many sellers struggled to find buyers, many houses and apartments remained on the market for longer and the supply increased.

"We are also cautiously optimistic about the construction financing market this year," says a spokesperson for Schwäbisch Hall, Germany's largest building society. "The bottom of the construction financing market has probably been passed." The company expects relatively stable interest rates combined with moderately falling property prices and sharply rising rents to motivate more people to buy again. A third of residential buildings are considered to be energy-inefficient

There is also a second factor: the need for energy-efficient refurbishment of older homes. "A third of the 20 million residential properties in Germany are not considered to be energy-efficiently renovated," says the Schwäbisch Hall spokesperson. Many owners also apply for loans for this. "This represents an annual financing potential of 80 billion euros."

Interhyp and Schwäbisch Hall are not alone: Last Wednesday, the 60 Bavarian savings banks also reported an increase in real estate loan commitments to private customers in the first two months. "That makes us confident that this can continue," says Stefan Proßer, Vice President of the Bavarian Savings Banks Association. And the Lübeck-based financial services provider Hypoport also reported rising figures for its Europace financing portal in the fourth quarter./DP/he