ᐅ Is Buying a House a Wise Decision in the Current Market Situation?

There was also a huge interest rate hike in Russia. At the start of the war, the Russian key interest rate rose from 8.5% to 20%.

Well, after its crash in early March, the ruble has appreciated significantly and is now trading again at pre-war levels.

If gas payments must now be made in rubles and a gold peg is established, the ruble will continue to strengthen. The West has seriously miscalculated here. A strong ruble means more expensive oil and gas.

If deliveries stop, Germany would face an economic bloodbath. Prices would rise so dramatically that the ECB would have to raise interest rates sharply and quickly, regardless of the consequences. In my opinion, this should have happened a long time ago. I still believe we will see rates of 5–6% this year.

There is a real risk that the ECB will lose control of inflation. Lagarde is still talking about temporary inflation today, apparently not realizing it has been rising for a year now—and accelerating. Since she always refers to inflation expectations, the outlook is currently very bleak.

Meanwhile, I am reading how the positions are becoming increasingly rigid. On one hand, the US dollar risks devaluation due to the sanctions, accompanied by a strong appreciation of the ruble.

On the other hand, the Federal Ministry for Economic Affairs is considering the expropriation of Russian corporations in Germany. Gazprom and Rosneft are to be expropriated along with their subsidiaries in Germany. Rosneft operates the refinery in Schwedt.

So here, they are clearly moving towards full confrontation with Russia. I do not think these are wise and well-considered steps. They should just keep a low profile.

Peter Pohlmann schrieb:

In Russia, there was also a huge interest rate hike. At the start of the war, the Russian key interest rate rose from 8.5% to 20%.
Well, the ruble has significantly appreciated again after its collapse in early March and is now trading at pre-war levels.

If gas payments have to be made in rubles and a gold backing is established, it will continue to appreciate.
The West seriously miscalculated here. Strong ruble, more expensive oil and gas.

Honestly, it’s hardly worth responding to your statements, but talking about an appreciating ruble when it’s currently not traded internationally at all just shows how little you understand. The exchange rate you’re referring to is basically made up. The fact that Russian citizens cannot exchange their “valuable” rubles for other currencies in foreign exchange markets seems to me like a desperate attempt to keep the currency stable. By the way, there are increasing reports that on the Russian black market, 300 to 400 rubles are currently paid for one US dollar…

We also searched unsuccessfully for four years and watched prices keep rising. For family reasons, we moved to a significantly more affordable area for a few months and even considered buying something there. In the end, we realized that we simply didn’t feel at home there (even though my wife is originally from that area) and moved back. We then decided that we preferred to live here, even though it involves many compromises (finding a sufficiently large rental apartment is extremely difficult with two children and pets, and we currently lack an extra room). Fortunately, a few weeks ago, we were offered a plot of land by the municipality (which we had been applying for since 2018 and kept getting rejected for), and now we can finally build in our desired neighborhood.

What I want to say is this: if you really want to stay in your current area and haven’t found anything after years of searching, you will probably have to either give up the dream of a detached house or ask the city for available plots and be persistent. We inquired persistently for nearly four years and kept getting refusals until it finally worked out. Of course, this does not always have to be successful, but it sounds like your only chance (just as it was for us), so I would definitely give it a try. The idea of buying a rental condominium a few months ago might have been worthwhile, but I now doubt that it makes much sense with current prices and interest rates. It’s better to park the money in other types of investments; this also has the advantage that the funds are more quickly accessible if you eventually find a suitable existing property. Also, you often cannot get plots from the city if you already own real estate.

BackSteinGotik schrieb:

When it comes to existing buildings, only the category of very new houses remains really interesting. Renovations are fine, but extensive refurbishments and conversions to bring settlement houses up to 2022 standards are hardly worthwhile and carry risks similar to new builds.

However, refurbishments have the advantage that you can achieve a higher energy efficiency rating. An all-inclusive approach will, of course, be expensive.

Ysop*** schrieb:

Renovations do have the advantage that you can invest more into eligible subsidies. All-inclusive packages, of course, get expensive.

Yes, but even so, the renovation baseline cost itself is already way too high (often demolition plus new construction is actually the most sensible approach, but not feasible due to cost). And if you really need to tackle energy efficiency properly (this will definitely be a requirement for 2023, 2024), I’m not sure how much subsidy support will still be available for that (underfloor heating, insulation, etc.)—except in traditional tradesman’s houses where the builder has direct access to specialized craftspeople.