The real estate market is changing: homes are being advertised for longer and longer. “We noticed last fall that the number of loan applications had dropped by three quarters, just because of the initial interest rate increases. Of course, we now also feel this effect, that the properties cannot be put on the market and cannot be sold,” says Michael Toms, real estate expert and director of Asset Up in the krone.tv Talk. The transactions that take place are new-build homes or apartments that require little renovation.
According to the real estate expert, everything indicates that the market is becoming cheaper. “We see in the surrounding real estate markets in surrounding countries that this effect has already continued.” The fact that the effect occurs so late in Austria is because companies were very well positioned, says Toms. However, due to inflation, liquidity is now becoming increasingly limited. “The effect will be that one or the other will have to sell, both projects and individual apartments or houses. This is only possible if prices also fall. Only then will buyers be willing to finance it.”
A distinction must be made between homes, mainly on the basis of the condition of the property: “There may even be properties in very bad locations that, despite a price reduction – to put it exaggeratedly – by half or 70 percent, still remain unsellable because they are so difficult to sell, are rented out, need so much renovation.” On the other hand, there are good, new properties that are reasonably priced and where you will hardly experience price drops.
“In the future we will think about the entire life cycle”
Stagnant developments in the construction sector, vacant speculative properties and falling prices. So what does the future hold? ‘We notice that the entire value chain is affected by these effects.’ But you also see that everyone along this value chain, from planners, architects, constructors and other service providers, approaches the matter with many new ideas and motivation. . “We notice that a lot is happening here in the field of innovation and thinking. Many technologies will prevail in the aftermath of this crisis. The business model will also be made more sustainable. People will no longer think about the delivery, but about the entire life cycle.” This will also change the understanding of a property, says Toms.
You can watch the entire interview with Michael Toms in the video above.
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Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
