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Dear readers,
“In light of the challenging conditions – war in Ukraine, inflation, fears of recession, rising interest rates, high construction costs and supply chain issues – the prevailing mood on the real estate markets can still be described as ‘surreally’ good. We see no signs of a downturn at the moment. The logistics sector is currently benefiting most: supply chain issues stemming from the pandemic and the war have underlined the importance of stock-keeping and ushered in an end to just-in-time strategies. In addition, the manageable risks associated with logistics construction projects are a factor in the success of this asset class. There is no sign of a downturn and we expect demand to remain high. The same applies to the residential property market, where current levels of immigration, among other factors, are causing the supply gap to widen further. The situation is difficult in the new housing construction and property development segments, most notably for complex projects: many new construction projects have become unprofitable and are failing to yield any margins as a result of high construction costs and rising interest rates. This means that many of them have been currently put on hold. In light of the resulting tight supply, the key question is: how will yields develop?"
José Luis Calderón Martínez
Contact
Mr José Luis Calderón Martínez
Leiter Zentralakquisition, Head of Berlin Office, Head of Hannover Office
Phone: +49 511 361 - 6701
E-mail: jose.calderon@deutsche-hypo.de
The German real estate index has recorded a negative performance for the fourth quarter in a row. REECOX Germany declined by 2.3 % as the second quarter began; this was followed by a more or less unchanged performance in May (-0.5 %) and a substantial drop in June (-6.1 %). This was by far the most pronounced in Germany, with the German real estate index posting the sharpest drop of all the European countries, a decline of 8.7 % to 289.8 points.
Although all market variables contributed to the current trend in the German real estate index, they varied considerably in terms of their impact. The German blue-chip index DAX saw renewed sharp losses: down by 11.3% quarter on quarter, it is now trading at roughly 12,784 points, the lowest it is has been since September 2020. Losses of 11.3 % incurred in June in particular contributed substantially to this trend. The German real estate share index DIMAX recorded even greater losses: a drastic quarter-on-quarter decline of 26.0 % to roughly 596.0 points brought it down to a level not seen since April 2016. The DIMAX fell by a hefty 16.2 % in June alone. The business climate dipped only slightly in the second quarter, thus cushioning the distinctly negative performance of the remaining input variables. Estimates by real estate experts within the scope of the Economic Sentiment Indicator (ESI) amounted to an index value of 105.2 points at the end of the quarter – a relatively moderate decline of 1.7 %.
Country | Stock Index | Real Estate Economy Index | Economic Indicator | Base Interest Rate | Interest Rate 10-Year Government Bonds | Q1-22 | 04/22 | 05/22 | Q2-22 | Delta (%) Q1-22 / Q2-22 |
|---|---|---|---|---|---|---|---|---|---|---|
DE | dodo | dodo | dodo | eq | upup | 320.6 | 310.1 | 308.5 | 289.8 | -9.6 |
GB | do | dodo | dodo | upup | upup | 218.2 | 205.6 | 203.4 | 202.5 | -7.2 |
PL | dodo | do | do | upup | upup | 189.5 | 187.5 | 185.3 | 183.1 | -3.4 |
NL | dodo | dodo | dodo | eq | upup | 194.6 | 194.2 | 192.2 | 184.8 | -5.0 |
FR | dodo | dodo | do | eq | upup | 240.0 | 234.8 | 233.6 | 225.6 | -6.0 |
ES | do | dodo | do | eq | upup | 181.6 | 178.2 | 181.3 | 178.4 | -1.7 |
