Country Report Germany Q1-2022
“Concerns are already mounting on the real estate market.”

Dear readers,

„As the current situation shows, the risk of the German economy suffering a setback is higher than for other European countries, due to its strong dependence on foreign markets and export activity. Concerns are already mounting on the real estate market in connection with the fear of further interest rate hikes and the increasing interest in alternative investment opportunities, to name just two factors. Unusually strong inflation, rising construction prices, exorbitant transport costs and vulnerable supply chains are having a negative underlying impact on sentiment in the real estate sector. The effect is being felt by development projects in particular, and further challenges in construction cannot be ruled out going forward. However, the crisis has yet to put a dent in the real estate investment market, which remains robust and saw an agile start to the year. Logistics continues to perform well, even though the current crisis indicates that we need to reduce our dependencies and move away from a just-in-time mindset towards more resilient structures. The coronavirus pandemic has made us more resistant to crisis and given us greater experience, teaching us to navigate uncertainty better. We can only hope that we succeed in handling the current stresses – with their many uncertainties and challenging moments – with care and sound judgement and that we manage to use the momentum for transformation.”


Your Peter Kleinhütten

Contact

Mr Peter Kleinhütten
Acquisition North Rhein-Westphalia

Phone: +49 211 598951910
E-mail: peter.kleinhuetten@deutsche-hypo.de

German real estate index sees significant losses

The new year did not trigger a reversal of the negative performance recorded by the German real estate index in late 2021, with the REECOX Germany posting losses in all three months of the first quarter of 2022. March in particular, which saw a decline of 4.1 %, made itself felt in the worst possible way. However, the declines were not as sharp as they were at the start of the pandemic. All in all, the index recorded a significant drop of 6.0 % to 320.6 points.

DIMAX posts double-digit drop

Input variables were negative across the board. The German real estate index DIMAX again recorded a substantial decline, falling 11.5 % to end the first quarter at around 805.5 points – virtually where it was in April 2020. The German blue-chip index DAX also saw steep losses of 9.3 %, bringing it to around 14,415 points at the end of the quarter. The business climate, as monitored by the Economic Sentiment Indicator (ESI), posted moderate losses by comparison, losing 3.8 % in March after slight rises in January (+0.7 %) and February (+1.1 %). Overall, the indicator fell by 2.1 % to 109.2 points in the first quarter.

Synopsis of Input Variables and Real Estate Economic Situations Q1-2022

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q4-2101/2202/22Q1-22Delta (%)
Q4-21 / Q1-22
DE
dodo
do
dodo
eq
upup
343.4
340.1
334.3
320.6
-6.6
GB
up
do
upup
upup
upup
218.5
220.7
218.6
218.2
-0.1
PL
do
do
dodo
upup
upup
197.6
194.9
190.2
189.5
-4.1
NL
dodo
do
do
eq
upup
202.3
198.1
194.5
194.6
-3.8
FR
do
eq
dodo
eq
upup
251.6
248.7
246.7
240.0
-4.6
ES
do
up
dodo
eq
upup
186.0
186.1
187.0
181.6
-2.4