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Dear readers,
Europe is in agreement: Since early 2018, the development of the REECOX quarterly values in at least five of the six markets observed has been aligned – and that trend continued in the second quarter of 2019: With the exception of France where, happily, the REECOX rose, the Real Estate Economy Indices in all the other markets fell.
That development is, among other things, due to the deteriorating business climate in all the markets observed, with the exception of France. Escalating trade disputes and the weakening of the global economy are having an increasingly negative effect on sentiment in all markets. At any rate, companies consider their current situation and outlook to be significantly worse than in previous years. As a result of the dependence of the real estate sector on economic development, the impact of those trends on our industry is now also noticeable. We will see how sustainable the current development is as the year progresses.
Kind regards,
Your Sabine Barthauer
Contact
Ms Sabine Barthauer
Member of the Board of Managing Directors
Deutsche Hypo REECOX’s European Real Estate Economy Index (Euro Score) fell slightly in the second quarter. Following a short high in the first quarter, that continued the negative trend seen in 2018. While there were no significant changes in the months of April (-0.3 %) and June (-0.2 %), developments in May (-1.3 %) resulted in the negative trend for the quarter as a whole. The Euro Score therefore fell by 1.8 % overall, to its current level of 232.7 points.
Deutsche Hypo Euro-Score
With the exception of the French Real Estate Economy Index, the index values for all the countries observed by the Deutsche Hypo REECOX decreased in the second quarter.
That meant REECOX France developed positively for the second consecutive quarter.
That clearly contrasted with the situation in the United Kingdom: The REECOX UK displayed the largest comparative loss, falling below the 200 point mark. A year-on-year comparison underlines its dramatic development: Compared to June 2018, the index fell by approximately 20 points to its lowest level since summer 2016.
Noticeable, though less dramatic, declines were also seen in Germany
(-2.2 %) and the Netherlands (-1.6 %).
Meanwhile, the Real Estate Economy Indices in Poland (-0.4 %) and Spain (-0.6 %) were more or less stable. It should, however, be noted that REECOX Spain declined slightly but constantly, while developments in Poland were more volatile.
| Country | Stock Index | Real Estate Economy Index | Economic Indicator | Base Interest Rate | Interest Rate 10-Year Government Bonds | REECOX Q1-2019 / Q2-2019 |
|---|---|---|---|---|---|---|
DE | up | do | dodo | eq | dodo | do |
GB | up | do | dodo | eq | dodo | do |
PL | eq | up | do | eq | dodo | eq |
NL | up | do | do | eq | do | do |
FR | up | do | up | eq | dodo | up |
ES | eq | up | do | eq | dodo | eq |
