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Dear readers,
Everyone is talking about Berlin, even 1,100 kilometres away. At this year’s Mipim in Cannes, Berlin was the first subject in every discussion about investments in Germany. And there were a lot of discussions about Germany... the German real estate market is considered a ‘safe haven’ and continues to attract a lot of attention – including from international investors. Thanks to its ongoing growth, the Berlin real estate market is a particular area of focus. The recent debate about expropriation comes at a bad time and could endanger Berlin’s development, which has been positive for years, by scaring off potential investors. There is one thing we should not forget: Unlike in France, where Paris has a pre-eminent position, international investors in Germany have plenty of alternative investment opportunities. If they no longer like the conditions in Berlin, they will quickly turn their backs on the capital and try their luck in Frankfurt, Munich, Hamburg, Stuttgart, Düsseldorf or Cologne.
Your Alexander Firsching
Contact
Mr Alexander Firsching
Head of Berlin Office
Phone: +49 30 285016311
E-mail: Alexander.Firsching@Deutsche-Hypo.de
After the fourth quarter of 2018 put a damper on the development of the German Real Estate Economy Index, the first quarter of the new year has brought some relief. While growth of 2% to 303.4 points was moderate, the REECOX value is again above the 300 point mark, which it had fallen below for the first time since May 2017.
However, the development of the various input variables was extremely varied: The DAX performed well in the first quarter of 2019, climbing to 11,525 points at the end of March. That equated to strong growth of 9.2%, although that rise did not cancel out the losses from the second half of 2018. The DIMAX achieved similar positive development, rising by 888 points or 11.9% compared to the previous quarter. That set a new record, exceeding the previous high in August 2018. However, the positive development of the stock markets is not yet reflected by the Economic Sentiment Indicator (ESI). At 106.6 points, it fell by 2.5% to its lowest level since September 2016.
Country | Stock Index | Real Estate Economy Index | Economic Indicator | Base Interest Rate | Interest Rate 10-Year Government Bonds | Q4-18 | 01/19 | 02/19 | Q1-19 | Delta (%) Q4-18 / Q1-19 |
|---|---|---|---|---|---|---|---|---|---|---|
DE | upup | up | do | eq | do | 298.2 | 303.4 | 300.8 | 303.4 | 1.7 |
GB | up | upup | dodo | eq | do | 204.9 | 205.5 | 200.7 | 205.1 | 0.1 |
PL | up | upup | do | eq | do | 187.5 | 185.9 | 186.5 | 187.6 | 0.1 |
NL | upup | up | do | eq | do | 191.3 | 190.4 | 190.7 | 191.4 | 0.1 |
FR | upup | upup | do | eq | do | 223.7 | 225.4 | 225.9 | 228.3 | 2.1 |
ES | up | upup | up | eq | dodo | 191.8 | 196.4 | 196.5 | 199.3 | 3.9 |
