Status: 05.01.2023 2:20 p.m
Rising interest rates and waves of cancellations in the construction industry: Financing a home is becoming increasingly difficult for many people. This helps the home savings contract to rise again.
In view of rising building interest rates, consumers have rediscovered building savings for themselves. New business increased significantly last year. When it comes to the volume of newly concluded home loan and savings contracts, he assumes an increase of 40 percent compared to the previous year, said the chairman of the board of the Association of Private Building Societies, Bernd Hertweck, the dpa news agency.
The average home savings sum per contract is now at a high of over 70,000 euros. According to Hertweck, the number of units increased by 15 percent in 2022.
Interest between 1.5 and 2.5 percent
The Association Director of the State Building Societies, Axel Guthmann, puts the increase in the amount of home savings for the months of January to September 2022 at almost 49 percent. The number of contracts concluded increased by 22.8 percent. The Landesbausparkassen account for around a third of the German market, with private institutes sharing the rest.
The reason for the boom is obvious, according to Guthmann: “Builders and buyers want to protect their real estate financing as best as possible against the risk of rising interest rates.” Secure equity formation and low-interest loans – that is the core idea of home savings. People would have rediscovered that for themselves in the spring.
When it comes to building savings, building interest rates of between 1.5 and 2.5 percent can still be secured in the long term, says Hertweck. For comparison: According to figures from the comparison portal Check24, the interest rates for construction financing of 300,000 euros at banks at the end of November were between 3.0 and 5.2 percent.
Dream of home ownership unbroken?
The run on building savings also shows that the dream of owning a home has not yet burst for many people, according to the building societies. Only: There are more and more problems with the feasibility. For many people, home ownership is currently not affordable, says Guthmann. And not just because there is not enough equity, but because many could no longer afford the loan installments.
As a result, German banks’ new mortgage lending business plummeted in the second half of the year. The consulting firm Barkow Consulting recently spoke of a record decline. A lot of money continued to flow from building societies into the housing market throughout the year: private providers expect to be able to reach their previous record of 31 billion euros in building loan payments from 2020 again in 2022.
And according to Guthmann, there is even a slight increase in public building societies compared to the previous two years. In 2021, 9.2 billion euros flowed. This is mainly due to the first half of the year. “In the meantime, however, the decline in demand for building finance is also being felt by building societies,” says Guthmann.