Many experts advise investing in real estate now, whether for your own use or as an investment. The prerequisites for this are good.
There are many reasons to buy a property, be it for personal use, for example because the family is currently expanding, or as a pension apartment. More and more people are relying on this option, as it opens up the chance of having an additional income later in retirement. In addition, real estate is “tangible” as an investment and can also be used later, depending on how the personal situation develops.
Property price and interest rates are important
The key point is always the financing. People who have put money aside, in particular, want to know that it has been invested safely, and a condominium, for example, is ideal for this. But even those who cannot put the purchase price “cash” on the table should think about a purchase if the framework conditions are right, i.e. the property, size, location and price have a balanced relationship.
Real estate financing primarily has two external variables: the property price and the interest rate situation. “The prices are rising inexorably, but the interest rates are still very low in comparison,” says Andreas Luschnig, who heads the Interhyp branch in Vienna: “We believe that this is a good time for many people to deal with housing finance. But every house or apartment purchase is a big investment that should be well planned and thought through. “
Make solid calculations
The interest rates for real estate loans in Austria hardly changed in June after a slight increase in interest rates in the spring. Home buyers received loans at fixed interest rates of around 1.2 percent in early July. The reasons for the higher interest rate level include higher inflation, better economic forecasts and higher swap rates.
“In the next few weeks, a sideways movement in terms of conditions seems most likely,” says Luschnig. “Customers with financing needs should make themselves as independent as possible of short-term market trends through solid calculations and long-term decisions,” recommends Mirjam Mohr, Board Member for Private Customers at Interhyp AG.
As in June, the best interest rates for variable loans in Austria were around 0.3 percent nominal and 0.64 percent effective in July. For ten-year fixed interest rates, the best interest rates are currently around 0.9 percent nominal and 1.2 percent effective with a loan amount of 300,000 euros and a term of 30 years.
Interest rate forecasts difficult in corona times
The majority of the experts in the monthly Interhyp building interest trend barometer expect interest rates to move sideways at this level over the next few weeks. In the medium to long term, i.e. on a half-year or annual basis, the interest rate level could continue to rise. However, predictions are very difficult, especially in corona times.
“Real estate buyers with a specific property should not speculate on falling interest rates, but secure the financing now,” advises Luschnig. He also recommends keeping an eye on the significantly increased material costs when financing. This could lead to price changes.
Tax tip pension apartment
Many people use the current framework conditions to buy an investment apartment. You can also gain some tax advantages. It must be clarified in advance in which form the property is to be bought, i.e. via a company, as an individual buyer or as a co-owner. Anyone who buys an apartment in order to rent it out must declare the income in the income tax return; the expenses are deducted. There is then also the option to claim input tax, both from the purchase and from the expenses. Anyone who earns rental income has to pay sales tax of ten percent. But it is also important: After 20 years, a surplus must have been achieved, otherwise the rental is considered a “hobby”. It is therefore advisable to consult a tax advisor before making a purchase.