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ePaper created 2015-04-21, 16:47:46 | version 1.37.0
15management report construction in growth regions has not yet satisfied demand and has led to housing shortages. This is reflected by the 2 per- cent vacancy rate currently noted for apartments in growth regions. Last year’s high demand and rising prices again aroused fears of a speculative property bubble forming in Germany. Although the German Institute for Economic Research (DIW) sees indications of speculative excess in certain cities, mainly for newly built housing, it considers the overall German property market to be in good condition. The Bundesbank has also commented on over- pricings, which are particularly visible in cities. “The trend to loans with longer terms of fixed-interest remained intact as more and more customers sought to lock-in low rates of interest for the long-term.” Interest rates for financing residential property fell again in 2014 and have reached historic lows. Fixed interest rates for up to 30-year loans fell to below 3 percent. This has spurred a trend towards loans with longer terms of fixed interest rates as more and more customers seek to lock-in low interest rates for the long-term. At the same time, the German Bundesbank reported that the average annual initial rate of repayment of capital has risen by 0.8 percentage points since 2009 to 3.6 percent. Lending in 2014 is estimated to have expanded moderately by about 2 percent. According to the Bundesbank, banks’ lending standards remained fairly constant although the share of fully financed transactions, with loan-to-value ratios of 100 percent and more, increased slightly, especially in cities. Competitive pressures in the private property financing sector in Germany remained unchanged in 2014 as new providers, like insurance companies, increasingly tried to establish themselves in the market. According to Bundesbank data, up until the end of the third quarter the Volksbanken and Raiffeisenbanken were able to further expand their market share to 21.3 percent or 0.7 percentage points more than at the end of the third quarter in 2013. This increase was driven by the banks’ close relationships with their customers and the high quality of the advice they pro- vided to them. Residential Property – International Based on the latest available date from Eurostat, house prices in the European residential property markets recorded stable devel- opment across Europe during the first half of the year. In addi- tion, first signs of a slow recovery were seen. * 2014 = estimated Source: German Federal Statistics Office Figures in 000 | Residential Building Permits in Germany 2003 – 2014 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0 100 200 300 400 297 269 240 248 182 175 178 188 228 241 272 285* 200320042005200620072008200920102011201220132014 240248 182175178188 228241