Country Report Germany Q1-2019
“The recent debate about expropriation comes at a bad time and could endanger Berlin’s development, which has been positive for years.”

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

German Real Estate Economy Index starts the year strongly

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.

Stock markets drive positive development

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.

Synopsis of Input Variables and Real Estate Economic Situations Q1-2019

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q4-1801/1902/19Q1-19Delta (%)
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