German Mortgage Market overview

How COVID-19 might affect Germany’s property market

Times are becoming weirder and weirder, and change is coming fast. Germany is now on the top 10 countries affected by the COVID-19 pandemic, and new preventive measures are being placed by the German government to try and control the contagion curve of coronavirus. An economical backlash is imminent – but what will be the effects on Germany’s property market?

 

Economical Growth in Germany

Overall, the German economy had already started to slow down in the last quarter of 2019, when the first effects of the coronavirus outbreak in China became visible. From October to December, the economic growth was, indeed, zero, according to the German Federal Statistics Office. One of the possible reasons? China holds important customers and suppliers for German companies, especially in the vehicle industry.  

 

Now that only restaurants, supermarkets, and pharmacies remain open – and the borders, closed – we can expect to see a more negative effect in general, which economists hope to rebound the economy back to normal in the second half of 2020. 

 

COVID-19 and the German property market

The property market is, of course, much different than the stock market, and will feel the effects of the coronavirus outbreak at a much slower pace. The worst-case scenario at the moment is that building sites will be shut down as part of the emergency measures in the hope of containing the virus more quickly – and that could last for up to 3 months. 

 

So in that sense, the news is not so positive for buyers who had invested in a newly-built flat as they might be delayed. But on the other hand – honestly, even in Germany, do companies ever deliver the flats at the promised time?

Research so far shows that prospective home buyers don’t feel discouraged by the COVID-19 outbreak, according to the UK lettings and sales agent Benham and Reeves. 83% of home buyers and sellers still wish to purchase a new home in 2020.

 

The Mietendeckel – or Berlin Rent Act, in English – seems to have a much more immediate effect on the German property market. Of course that a recession would impact the value of properties on the market, but housing is still considered a long-term investment that shouldn’t be postponed due to short-term emergencies. The overall pay-off is still greater than the risks.

The Advantage: Lower Interest Rates

With the economy under such a threat, it’s quite likely that banks will lower their interest rates and taxes to create more financial opportunities and a fiscal boost – in fact, the UK has already done so and other European countries are likely to follow. 

 

If you are a prospective property buyer with a secure job and steady income, it might be a good idea to take advantage of this short term momentum and find your dream home in Germany. If the COVID-19 follows the path of past outbreaks, it will hopefully be contained by the first half of 2020, and we could anticipate a possible rebound in markets from August on.

 

One Thing To Watch Out: Border Closures

The most realistic of negative outcomes in these times of COVID-19 outbreak are the border closures around Europe, Germany included. At the time of writing, Germany has border control with Austria, Denmark, France, Luxembourg and Switzerland, and it remains unclear if airports will stay open for much longer. Please bear that in mind if you are planning to visit your future investment in the near future.

 

Whilst plans are put on hold, enjoy this time to consider your loan options and get documents in order for your future property investment in Germany. LoanLink can help you with that! We are a mortgage broker based in Berlin focussing our consulting Expats/ foreign investors on their property purchase in Germany. 

Got a question about the real estate valuation or home purchase process for non-German residents in Germany? Contact us!

You may email us at [email protected] or by phone +49 (0) 30 5683 7535. You can also start with the LoanLink mortgage illustrator here:

What our customers say about us

Joop Tange
Joop Tange
10:01 23 Feb 20
Absolutely pleasure to work with them. They were quick and clear with collecting all kind of documents. Quick in replying emails, whats app messages etc. Nice communication. 1 point of attention for them. dubbelcheck the holiday back-up. But overall; i would choose them again. Trustworthy and helpfull. I didn't know any of germanlaws etc. They helped me out with everything to understand well. Thanks againread more
W C
W C
18:24 14 Feb 20
LoanLink helped me secure financing at a great rate and I am thoroughly grateful. My representative in Berlin was Jan, and he responded promptly and kindly to all my communications--honestly this was the best service I've ever had since arriving in Germany, and I'm glad it was on such an important front =) I would HIGHLY recommend LoanLink for serious inquiries about financing, they do an impeccable job.read more
王紹權
王紹權
20:56 11 Feb 20
Super supportive institute and strong agent. The process are clear and straight-forward. Agent i met is a great guy and very supported. Recommended!read more
Melissa Rodrigues
Melissa Rodrigues
19:59 11 Dec 19
Highly recommend LoanLink! Jan was our advisor and he was everything you could ask for -- dependable, helpful, respectful, quick to answer our questions, always thinking a step ahead, and very good at explaining complex mortgage topics! So happy with LoanLink.read more
Ana Batanero
Ana Batanero
17:07 03 Nov 19
The way to go to get a mortgage! LoanLink really helped me in the process of applying for a mortgage. The service was really quick and I got a really good interest rate. The agent that supported me was always super fast in the communication and always available for a call. Highly recommended.read more
Don Won Lee
Don Won Lee
16:25 17 Oct 19
Kind, quick and accurate. The best service I’ve ever had in Germany!
Marco Gonsalvi
Marco Gonsalvi
10:21 24 Sep 19
Awesome service. The Loanlink team is simply fantastic. Clear website, accurate information, easy to read comparison of different options and timely responses to any questions I had. I would not hesitate to use Loanlink again in future. Definitely recommended.read more
Nik Eleftheriou
Nik Eleftheriou
12:06 05 Sep 19
Fantastic experience with Jan and co at LoanLink. They were helpful and patient the entire way through. Thanks!
Nefidova Polina
Nefidova Polina
16:06 30 Jul 19
Me and my husband are happy that found this company. The guys are fast reactive, always very helpful. They speak a very good English, which is very important for us. Definitely can recommend to work with them.read more
ning zhong
ning zhong
15:47 23 Jul 19
Jan is a very good person. He gave us patient and careful guidance and helped us get a loan successfully. Loanlink is the right choice for getting financial support during property purchase.read more
Nikita Belokopytov
Nikita Belokopytov
15:12 12 Jul 19
Open, approachable and very friendly. Jan, the mortgage advisor was with us every step of the way. He was always very friendly, empathic and helpful. He was never trying to sell us something that we did not want and went to an extra mile twice for us. The whole process took about 4 weeks, which is quite normal. Loanlink have helped us to prepare the documents, find a good offer and negotiate an even better interest rate. They have even handled a real curve-ball from the bank in a way that we could not have done ourselves. I wish they made it big and I believe they have every opportunity to do so.read more
Kurt S
Kurt S
09:59 25 Jun 19
Trying to purchase property whilst between 2 countries is a challenging and time consuming task. The LoanLink website was excellent in providing helpful information and also in outlining our options. Jan, our consultant, was always very responsive and guided us through the financial options (in both Deutsch and English language). We're very grateful for the help and the loan that LoanLink was able to broker for us.read more
Nadia Tcherniak
Nadia Tcherniak
13:42 20 Jun 19
I have really enjoyed my whole experience with LoanLink. Both me and my husband speak German and have experience in the German real estate market and we still chose to deal with LoanLink as our mortgage broker. Why? 1) 100% online. We are both working full-time and have little time left for long face-to-face appointments and consultations. I loved the user-friendly interface of LoanLink and the possibility to upload everything online. 2) Our broker, Jan was very responsive and efficient. We got an approval in no time. 3) We got a GREAT offer from the bank through LoanLink and are very happy with it. When we will be buying the next property, we will definitely use LoanLink again.read more
Hnin Wah
Hnin Wah
12:12 12 Jun 19
As being a Non-EU citizen with limited German language, it was impossible to get mortgage loan before I found out about LoanLink. Stefan Köppen is my mortgage advisor from LoanLink. He is extremely professional and very responsive by answering all my questions immediately during the process of getting the loan to buy my first home in Germany. Not only he did get me a mortgage loan but also he had the best customer service I've ever seen to help me becoming first time homeowner. Thanks Stefan (LoanLink), I appreciate your great work!read more
Yuriy Nazarkin
Yuriy Nazarkin
08:20 07 Jun 19
Just signed my mortgage contract! Support which received from LoanLink colleagues was impressive, helped me a lot during all steps of application. Nice and professional people to work with. 100% recommend!read more
Ziad El-Jayyousi
Ziad El-Jayyousi
06:08 25 May 19
Highly recommended. Professional and Friendly team, prompt communications. Additional help provided when needed. The whole application and approval process from start to finish with the bank mortgage contract in the mailbox was complete within the same business week! Couldn't have had a better service than this, and highly recommend LoadLink!read more
A B
A B
11:04 21 May 19
I can leave only very positive feedback from my experience with LoanLink and especially with my broker Stefan Koeppen. Stefan was always very professional and fast with his actions. He was very well in structuring a deal and always could find alternative solutions when something went in a wrong direction or was not so applicable for me. He was open, transparent, ready to help with valuable advises when needed and very operative/fast (which is not common for Germany). Many thanks and good luck Well done!read more
Marija Koteva
Marija Koteva
07:00 20 May 19
Fantastic experience, they are always available and very knowledgeable for all mortgage-related topics, even for general property market information. I had a specific case with being on a visa, and only a couple of months in Germany and did not think I would be even eligible for a mortgage, but LoanLink found great offers for me. Trustworthy, personal, professional, reliable - I could not thank Stefan enough for helping me get my first home.read more
Thiago Medeiros Araujo
Thiago Medeiros Araujo
16:56 13 May 19
LoanLink was great! Stefan gave us an excellent support! Great option for expats in Germany! He found was an option when other banks said it was not possible! Highly recommended!read more
princess dyanne tuliao
princess dyanne tuliao
19:24 12 May 19
Through Loanlink we were able to find competitive bank loan offer. It was even better than another offer made through the same financing bank. The colleagues are very professional, supportive and available whenever needed. Excellent customer service! 🙂read more
Tracy Comstock
Tracy Comstock
12:40 29 Apr 19
Without LoanLink, I do not think we would have been able to purchase a property here in Germany. Başar was wonderful; he was incredibly responsive, he had a host of contacts who could speak to us for a variety of situations, and he was also just really friendly. He took the complicated process of buying a new build property in a country where we aren't fluent in the language, and made it accessible and easy. I would recommend this company to any ex-pat looking to buy in Germany.read more
linda gunarso
linda gunarso
00:53 22 Feb 19
I found loan link from Google. I tried getting in touch to find detail info on home loan In Berlin. Jan called me and has been assisting me since then until the purchase is finally completed. He is very patient in getting my queries answered and to go through every step following my busy time as a Mother with infant. He is quick to respond and proactive in getting in touch to make sure the loan application in progress. I really appreciate his assistance and patience. Thank you very much.read more
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