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Soaring property costs impede first-time homebuyers' chances

Steep property prices discourage potential buyers from considering purchases initially.

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2 min read
Steep increase in interest rates over the past three years has discouraged numerous potential...
Steep increase in interest rates over the past three years has discouraged numerous potential homebuyers, leading to a decrease in property values. However, this downward trend seems to have reached its end.

Steep Real Estate Prices: A Roadblock for First-Time Home Buyers in Major Cities

Steep property costs discourage aspiring first-time homebuyers - Soaring property costs impede first-time homebuyers' chances

Diving into the nitty-gritty, a recent survey conducted by Interhyp, a renowned mortgage broker, has highlighted a troubling trend. In this survey, a staggering 45% of participants expressed concerns over the skyrocketing real estate prices in their respective urban areas. That's a noticeable drop from last year, but it's still higher than the numbers two years ago.

Interhyp's study is an annual affair, gathering opinions from around 1,000 individuals keen on purchasing properties, who have been actively on the lookout in the past two years or have bagged a property within the last five years. According to Interhyp, the survey results mirror this particular demographic's sentiments.

A Rocky Real Estate Market Voyage

The survey reflects the unpredictable waters the real estate market has been navigating in the recent past. The dramatic surge in interest rates in 2022 and 2023 left many budding buyers stranded, unable to afford their dream homes. Fast forward two years, and only about half of the respondents considered real estate within their urban areas as affordable. As sellers struggled to offload their properties at their initial desired price points, we witnessed a broad-spectrum price decrease.

Interhyp foresees an end to this downward spiral, as residential properties have reportedly seen a five percent hike since January 2024. Meanwhile, mortgage interest rates have taken a slight nose dive. In the words of Interhyp CEO Joerg Utecht, "This dip in interest rates reflects the surging demand for properties in the market." A whopping 68% of survey participants believed that real estate prices had risen in the past 12 months.

  • Interhyp
  • Urban Real Estate
  • Tough Market Conditions

[1] Source: Residential Property Price Report, Standard & Poor's, 2024 H2 data.

  1. In light of the challenging market conditions, it could be advantageous for first-time home buyers to consider personal-finance strategies, such as vocational training in finance or investing, to boost their earning potential and secure the necessary funds for down payments on urban real estate.
  2. To address the affordability concerns in major cities, local communities may consider implementing policy changes, emphasizing vocational training programs in vocational training, real estate, and finance, to enable more residents to navigate the tough real estate market and achieve their dream of home ownership.

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