In view of higher interest rates on loans and expensive materials, homebuyers and builders have to bring more money with them. On average, owner-occupiers contributed a good 142,400 euros in equity to build or buy a property in the first quarter – almost ten percent more than in the first quarter of 2022 (around 129,900 euros). This is shown by data from the mortgage broker Hüttig
According to this, in the first quarter of 2022 an average of 22.6 percent of the purchase price was contributed from own funds; at the beginning of this year it was 28.5 percent. In the case of owner-occupiers alone, the equity share increased by 6.5 percentage points, it said.
According to the evaluation, owner-occupiers paid an average of half a million euros for a property in the first quarter, so the higher equity share is reflected in 32,000 euros. For owner-occupiers, the purchase prices fell quite significantly by a good 6 percent in the first quarter compared to the fourth quarter of 2022, said Benjamin Papo, CEO of Hüttig
Borrowers repay more slowly
Despite falling prices, the monthly burden for new loans has risen year-on-year – by 18.5 percent for owner-occupiers to an average of EUR 1,841 and for investors by 13.5 percent to EUR 1,199. The reason for this is the building interest, which almost quadrupled last year for ten-year loans and was recently around 3.8 percent. In addition, the requirements of banks have increased: They often check loan applications more critically.
In order to reduce the financial burden, borrowers switched to shorter maturities, says Hüttig
Borrowers also repaid more slowly. The average repayment rate for owner-occupiers has fallen from 2.58 percent at the beginning of 2022 to 2.16 percent most recently. Although this reduces the monthly burden, Hüttig calculates that the repayment period will be extended by almost three years under the same conditions
