Country Report Germany Q2-2019
“As long as the ECB continues its expansive monetary policy, the German real estate market will remain bullish.”

Dear readers,

The effects of current housing policy – with the watchwords rent control and expropriations – are clearly reflected by the decrease in the real estate share index DIMAX. The current decreases in the German Real Estate Economy Index are almost completely due to the development of the DIMAX. Apart from that sign of a slowdown, the German real estate sector continues to be in excellent shape. Liquidity continues to be high. Although the shortage of supply, particularly in the top seven metropolitan areas, is hampering investors, the domestic boom continues unabated. Germany is and remains in demand internationally. As long as the ECB continues its expansive monetary policy, the German real estate market will remain bullish. The low level of interest rates is keeping the party going. But an exogenous shock, no matter where it comes from, could quickly pull the plug.


Your José Luis Calderón Martínez

Contact

Mr José Luis Calderón Martínez
Leiter Zentralakquisition

Phone: +49 511 3045-807
E-mail: jose.calderon@deutsche-hypo.de

REECOX Germany slides back below the 300 point mark again

The German Real Estate Economy Index began the first quarter with a slight recovery and remained above the 300 point mark. However, in the second quarter it fell by 2.2 %, cancelling out the rise at the start of the year. Developments in June (-2.1 %) made a significant contribution to that quarterly result, while there was little change in April and May. At the end of the second quarter, REECOX Germany stood at 296.6 points. Overall, that continued the downward trend that began after a historic high in August last year.

DAX and DIMAX are moving in opposite directions

The development of the input variables was thereby partly contradictory. The German leading share index DAX continued its positive development in the spring, and is currently above 12,000 points. Its closing level in June was 12,399 points, which equates to an increase of 7.6 % compared to the previous quarter.
However, the generally positive sentiment on stock markets was not reflected by developments in the real estate share segment as measured by the German real estate share index DIMAX. Following a double-digit rise in the first quarter, it fell by 8.9 % to 810 points.
The business climate, as measured by the Economic Sentiment Indicator (ESI), continued its negative development for the third successive quarter. At the end of June the business climate indicator stood at 102.6 points, a decrease of 3.8 % compared to the previous quarter.

Synopsis of Input Variables and Real Estate Economic Situations Q2-2019

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q1-1904/1905/19Q2-19Delta (%)
Q1-19 / Q2-19
DE
up
do
dodo
eq
dodo
303.4
302.4
303.1
296.6
-2.2
GB
up
do
dodo
eq
dodo
205.1
203.7
196.2
198.9
-3.0
PL
eq
up
do
eq
dodo
187.6
185.5
183.7
186.8
-0.4
NL
up
do
do
eq
do
191.4
192.9
188.4
188.4
-1.6
FR
up
do
up
eq
dodo
228.3
230.4
230.4
231.8
1.5
ES
eq
up
do
eq
dodo
199.3
198.8
198.2
198.0
-0.7