Market Trends for 2023/24 in the Ratingen–Velbert–Mettmann Region

The result: a significant drop in real estate transactions, hardly any new construction projects coming to fruition, and prospective homebuyers feeling extremely uncertain.

The central question facing the real estate industry in 2024 revolves around what people can still afford and are willing to pay given the new market situation—how can sellers’ asking prices, realistic market prices, and buyers’ budgets be reconciled?

Amid these general upheavals, the cities of Velbert, Ratingen, and Mettmann are showing different reactions to developments in the real estate market.

The main problem has become abundantly clear since at least mid-2023: These days, when financing a property, one must expect an annuity (the annual loan payment) of about 6%—yet while interest rates have continued to rise, the budgets of potential buyers have often remained unchanged. By way of comparison: Just a few years ago, it was possible to finance €500,000 with an annuity (interest and principal repayment) of around 3%. Today, buyers with a comparable income can only secure financing for about €250,000. If they have little or no equity, they are forced to wait to make a purchase until prices either fall or new government incentives become available.

Currently, therefore, it is primarily those with substantial equity who are benefiting from the market changes. Nevertheless, the forecast for 2024 suggests that prices could stabilize depending on the type of property and its location, as the drastic interest rate hikes of recent months may already have come to an end. Interest rates have been moving sideways at a stable level for several weeks, and mortgage rates have even recently fallen back below 4%.

In Velbert, declines in real estate prices were observed in 2023, at least for older existing properties and those in need of (energy-efficiency) upgrades. Properties built more recently, with contemporary construction and energy standards, are less affected by these value adjustments, while properties in need of renovation have seen price declines of over 20% in some cases. Similar trends can also be observed in investment properties.

In contrast to Velbert, the market in Ratingen is more complex, as it is closely intertwined with Düsseldorf. As proximity to Düsseldorf increases, the dynamics of the real estate market intensify noticeably, resulting in significant differences even between different neighborhoods.

In Mettmann, potential buyers are presented with a balanced mix of the market conditions described above.

Amid a changing financing landscape, higher equity requirements are on the horizon, accompanied by uncertainties and delays in lending due to the wait for subsidies and, for example, KfW loans. Banks are thus increasingly coming into focus.

At the start of the year, a discrepancy between current asking prices and market and mortgage lending values is still expected. This situation will require buyers to contribute a higher equity share. This dynamic reinforces the role of banks in financing but also leads to continued cautious lending and, consequently, a smaller pool of buyers.

The current landscape of federal, state, and local government subsidies is difficult to assess: Some subsidies have been exhausted, while others are accessible only under specific conditions that are unattainable for many. For 2024, subsidy options remain complex, and it remains to be seen what political (budgetary) decisions will be made in this regard.

Due to changing energy policies, stricter regulations, and new funding opportunities, a property’s energy efficiency is increasingly being taken into account in property valuations. In particular, the decline in prices for existing properties in need of modernization suggests that potential new owners are increasingly concerned about having to carry out the necessary energy-efficiency measures and meet regulatory requirements at considerable additional financial cost—which is why demand is lacking and asking prices are having to be adjusted downward.

Appraisal committees play a crucial role in the valuation of real estate. The appraisal committees in the municipalities maintain what is known as the “purchase price database.” All notarized purchase agreements are forwarded by the notary offices to the appraisal committees so that they can be analyzed. Based on these analyses, the appraisal committees prepare a real estate market report, which is typically published annually. However, in light of current market volatility, the Ratingen Appraisal Committee published a semi-annual report as early as 2023 to enable a more accurate market assessment using up-to-date key figures. This interim analysis, which had become necessary, demonstrates the rapid pace at which prices have changed. At the end of the year, the analysis of purchase agreements recently revealed two notable trends in the regional market:

1. Existing Homes Over New Construction
   While real estate sales in the region stagnated for much of the year, the number of single-family homes sold in Ratingen rose significantly toward the end of the year—properties that had been on the market for over six months and required substantial modernization—because sellers realized that their originally targeted prices were no longer realistic and, with winter approaching, showed greater willingness to negotiate. This can be seen as a possible sign that the coming year will see a general alignment of asking prices with realistically achievable prices and buyer budgets, with a particular focus on existing properties in need of investment.

2. Properties with No Price Decline
   Another surprising observation by the appraisal committee was that, in Ratingen, some undeveloped lots were sold at prices that either matched the current standard land value or even exceeded it. This suggests that, compared to developed lots, undeveloped lots may at least not experience a decline in value—and may even see an increase in value. However, the number of undeveloped lots available for sale within a given year is usually low. Building lots are in short supply in Ratingen.

Relatively fewer dramatic changes are expected in 2024. Nevertheless, it will remain interesting to see how the real estate industry and the real estate market can resolve the dilemma posed by the fact that, on the one hand, the need for housing remains strong, but on the other hand, very little new construction is taking place and financing existing housing is becoming increasingly difficult.

The complex market dynamics require increasingly in-depth consulting services to ensure that the interests of all stakeholders are optimally addressed.

At Kartheuser Immobilien, we offer comprehensive services and expertise that go far beyond simply analyzing market trends. We are committed to trust, honesty, and realistic assessments—ranging from successful brokerage to serving as a reliable partner in all real estate matters.