zeit.de
German Mortgage Market Surges 23 Percent in 2024
German banks' new business with private mortgages totaled "198 billion euros" in 2024, a 23 percent increase year-on-year due to slightly lower construction interest rates after ECB cuts, following a 37 percent drop in 2023 to "161 billion euros" due to high interest rates and construction costs.
- How did the previous year's significant drop in mortgage lending influence the current market recovery?
- The increase in mortgage lending follows a significant drop in 2023, when new business fell by 37 percent to "161 billion euros", due to rising interest rates and construction costs. The current upswing is attributed to decreased interest rates, making mortgages more accessible and prompting renewed consumer demand. However, uncertainties remain regarding future interest rate adjustments and potential economic impacts from the US.
- What is the overall impact of slightly decreased construction interest rates on the German mortgage market in 2024?
- German banks' new business with mortgages for private households and self-employed individuals surged to "198 billion euros" in 2024, a 23 percent increase compared to the previous year. This growth is attributed to slightly decreased construction interest rates following the European Central Bank's (ECB) key interest rate cuts, making mortgages more affordable. December alone saw "17 billion euros" in new business, a 40 percent increase year-on-year.
- What are the potential future risks or uncertainties that could negatively impact the sustained growth of the German mortgage market?
- While the current growth in mortgage lending is positive, potential risks remain. Rising interest rates since the beginning of the year and uncertainties in the capital markets regarding future ECB interest rate cuts may negatively affect the recovery. Further economic uncertainties imported from America concerning interest rates and economic growth could also hinder sustained growth in the mortgage market.
Cognitive Concepts
Framing Bias
The article frames the increase in mortgage lending primarily as a positive development, emphasizing the 'upswing' and using quotes that reinforce this positive outlook. The headline, if one existed, would likely reflect this positive framing. The inclusion of the quote "Der Aufschwung ist da" sets a positive tone early on, which could bias the reader towards a more optimistic interpretation.
Language Bias
While generally neutral in tone, the use of phrases like "Aufschwung ist da" ("The upswing is here") and the repeated emphasis on the positive growth figures could be considered slightly loaded language. More neutral phrasing could include 'increase' or 'growth' instead of 'upswing'.
Bias by Omission
The article focuses heavily on the increase in new business with mortgage loans, but omits discussion of potential negative consequences of this increase, such as increased housing prices or the potential for a future housing bubble. It also doesn't address the proportion of these loans that are going towards first-time homebuyers versus investors, which could significantly alter the interpretation of the data. Further, the article lacks details on regional variations in the growth of mortgage loans.
False Dichotomy
The article presents a somewhat simplistic view of the situation by primarily focusing on the positive upswing in mortgage lending without fully exploring the potential downsides or complexities. While acknowledging some uncertainties, it doesn't delve deeply into the potential negative impacts of rising interest rates or economic instability.
Sustainable Development Goals
The increase in demand for construction financing indicates growth in the housing market and potentially improved living conditions. This can contribute to sustainable urban development and improved housing quality, aligning with SDG 11 (Sustainable Cities and Communities) which aims to make cities and human settlements inclusive, safe, resilient, and sustainable. However, the article also notes potential future challenges that could hinder this progress.