Quarterly Report Q3-2019
Declining trend continues

Dear readers,

the Euro Score indicates a declining trend for the second quarter in a row. Does this mean that we have now finally passed the peak? That remains to be seen. After all, the REECOX is still at a very high level of 229.2 points.

Over the past few years, we have been experiencing an unusual cycle which has to end at some point, of course. But right now there is still a lot of optimism on the market – as demonstrated by the recent EXPO REAL, for instance. Real estate is still a highly attractive asset class and is in high demand among investors. Nevertheless, in a market phase like this it is more important than ever to focus on quality and accurately weigh up risks for every investment decision. If you do that, you will be well prepared for the end of the cycle.

Kind regards,


Your Sabine Barthauer

Contact

Ms Sabine Barthauer
Member of the Board of Managing Directors

Declining trend continues

After the Euro Score of Deutsche Hypo REECOX had already experienced a slight decline in the second quarter, this development continued in the third quarter. August (-1.1 %) saw the most pronounced shift, while July (-0.1 %) and September (-0.4 %) were marked by stagnation. The Euro Score fell by 1.5 % quarter on quarter to 229.2 points.

REECOX Eye Q3-2019

Deutsche Hypo Euro-Score

229.2

Trend reversal in the Netherlands?

However, the Euro Score’s consistent momentum does not completely represent the composition of the input values. While persistent negative development in the UK (-4.7 %) was appreciable in the third quarter, the second-strongest decline of the quarter – namely Poland, at 1.0 % – was much more moderate. Germany’s development was technically a negative figure but essentially stagnant at -0.3 %. After declines in July (-0.1 %) and August (-0.3 %), September represented a slight upturn (+0.1 %). Spain’s real estate market was also stable, with positive development in the two summer months (July: +0.3 %, August: +0.6 %) followed by a slight decline in September (-0.4 %).

The REECOX France is a clear counterpoint to the recession in the UK. France’s real estate sector grew by 1.2 %, marking the third positive quarter in a row. But the overall European winner is the Netherlands: after six consecutive quarters of decline, the REECOX Netherlands demonstrated the greatest level of positive development, at + 1.5 %.

Change of Input Parameters and Real Estate Economic Situations
Δ Q3-2019 / Q2-2019

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

REECOX Q2-2019 / Q3-2019
DE
eq
up
do
eq
do
eq
GB
eq
up
dodo
eq
do
dodo
PL
do
up
eq
eq
dodo
eq
NL
up
up
up
eq
dodo
up
FR
up
up
eq
eq
dodo
up
ES
eq
up
eq
eq
dodo
eq