Country Report Germany Q3-2018
“The lack of specialist staff is having a negative impact on the industry.”

Dear readers,

The mood at EXPO REAL was very confident once again. The positive energy at the exhibition centre was tangible. Investors are looking for investment opportunities across Germany. In Munich’s real estate market alone, many large-volume transactions will be concluded before the end of the year. Wherever you look there is pressure to invest. Capital is now increasingly looking for asset niches – with the hope of returns. For example, “light Industrial” properties are increasingly of interest to investors in the logistics sector. All in all, the real estate industry continues to perform well. However, I am concerned by the level of completions, which is far too low. The lack of specialist staff and the excessive workload for construction companies are having a negative impact on the industry. The biggest risk for developers at the moment is that they will be unable to find a construction company at a reasonable price.

Harald Nolterieke

Contact

Mr Harald Nolterieke
Head of Munich Office

Phone: +49 89 512 66 70
E-mail: Harald.Nolterieke@deutsche-hypo.de

German Real Estate Economy Index stands out positively

In the third quarter, the German Real Estate Economy Index displayed slight positive development and is currently at a level of 312.8 points. That represents an increase of 0.7 % compared to the second quarter. While (slight) negative trends can be seen in all the other countries assessed in the REECOX, the German Real Estate Economy Index was the only one to develop positively compared to the previous quarter.

DIMAX sees upturn, DAX stable

That positive trend was primarily due to the rising DIMAX, which increased by 3.6 % compared to the previous quarter, to 841.44 points. In September the DIMAX fell by 3.7 % compared to the previous month, following significant positive development in July and August.

Overall, the DAX was stable. While July and August were characterised by contrary developments, in September there was a moderate decline of 0.9 % compared to the previous month. On the last trading day in September, the German leading share index reached a level of 12,226.7 points, representing a slight decrease of 0.6 % compared to the previous quarter.

Following an overall decline in the Economic Sentiment Indicator (ESI) in the first half of the year, in the third quarter it rose again slightly, by 0.5 % compared to the previous quarter, to 112.5 points.

Synopsis of Input Variables and Real Estate Economic Situations Q3-2018

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q2-1807/1808/18Q3-18Delta (%)
Q2-18 / Q3-18
DE
eq
up
eq
eq
eq
310.7
314.9
316.3
312.8
0.7
GB
do
do
up
upup
up
219.0
218.8
218.8
216.5
-1.1
PL
up
do
do
eq
eq
189.1
190.8
189.8
188.3
-0.4
NL
up
do
eq
eq
eq
200.4
201.5
200.5
199.3
-0.5
FR
up
do
do
eq
eq
237.7
238.9
237.9
236.2
-0.6
ES
dodo
do
dodo
eq
eq
204.1
200.7
198.8
196.4
-3.8