NEWSLETTER
2024
November 27, 2024 ISSUE #58
JLL’S VICTOR OFFICE INDEX STABILIZES
The decline in value for German offices in top metropolitan areas appears to be coming to an end. In the third quarter of 2024, the JLL index of price and rent development in the best office locations in Berlin, Hamburg, Munich, Frankfurt and Düsseldorf was marginally higher than in the second quarter. The sum of the one-year change in value and cash flow yields was positive in all cities except Frankfurt.
October 31, 2024 ISSUE #57
RESIDENTIAL INVESTMENT MARKET MORE ACTIVE AGAIN
Brokerage firms put residential property turnover in the first three quarters of this year at between 4.8 billion euros (Savills) and 7 billion euros (Colliers). BNP Paribas Real Estate, NAI Apollo and JLL put the figure at around €6bn. Most estate agents agree that the transaction volume has increased compared to the same period last year. JLL, for example, reports +5%, CBRE +16%; only Savills reports a decline of 5%. The third quarter in particular has seen a lot of movement, according to reports.
August 31, 2024 ISSUE #55
BERLIN INVESTMENT MARKET SHOWS SLIGHT RECOVERY IN Q2 2024
In the second quarter of 2024, 144 apartment blocks changed hands in Berlin, representing a 5% increase compared to the previous quarter, where 137 sales were registered. However, the number of transactions remained almost unchanged from the same quarter of 2023, which saw 145 sales. According to the apartment block market report by Schick Immobilien, an estate agent, the market is experiencing a slight recovery, continuing the trend observed at the start of the year.
July 31, 2024 ISSUE #54
Q2 2024: BERLIN RESIDENTIAL PROPERTIES ARE INVESTORS’ DARLING
The Berlin investment market is experiencing an impressive recovery in the middle of the year. In the second quarter of 2024, commercial property purchases reached a comparatively high volume of 2.7 billion euros – a sharp increase compared to the first quarter with 0.8 billion euros. This brings investment turnover in the first half of the year to €3.5 billion, an impressive increase of two thirds compared to the previous year. This puts Berlin at the top of the list of German property strongholds by a huge margin, followed by Munich with 1.8 billion euros.
June 28, 2024 ISSUE #53
STUDY SHOWS: INVESTMENTS IN BERLIN ATTRACTIVE AGAIN
Prices for residential property in Germany have fallen in many places: in 2023, buyers in 384 out of 400 districts and independent cities had to spend less on an average condominium than in the previous year after adjusting for inflation. In 95 per cent of regions, the average purchase price has also fallen compared to the local annual net cold rent for a flat of the same size, according to an analysis by the Hamburg Institute of International Economics (HWWI) for Postbank.
May 29, 2024 - ISSUE #52
RESIDENTIALREALESTATE EMERGESASPRIMETARGET FORINVESTORS
The EMEA Living Sector Survey b y Cushman & Wakefield registers great optimism among international investors for the residential sector. More than half of those surveyed, who manage assets of more than EUR 1.4 trillion in real estate worldwide, stated that they had invested more than 20% of their real estate portfolio in the residential sector.
April 29, 2024 - ISSUE #51
OFFER PRICES FOR HOUSING STOCK ROSE IN THE FIRST QUARTER
According to Immowelt’s Price Compass, asking prices for existing apartments rose in 14 of the 15 largest German cities surveyed in the fifirst three months of 2024. The average price increase was 1.9%. In the previous quarter, purchase prices had already risen in 11 of the 15 cities, albeit by only 1.3%.
February 29, 2024 - ISSUE #49
GOOD LOCATIONS ARE IN DEMAND AGAIN
In the fourth quarter of 2023, the number of apartment building sales in Berlin rose by around 30% compared to the previous quarter. With 184 properties sold, the market is showing signs of recovery, according to the apartment building market report by estate agent Schick Immobilien.
January 30, 2024 - ISSUE #48
RESIDENTIAL PURCHASE PRICES COULD RISE SIGNIFICANTLY AGAIN FROM THE MIDDLE OF THE YEAR
The German residential real estate platforms Immowelt and Immoscout24 expect
purchase prices to rise again from mid-2024 onwards. The main reasons for this are the
stabilization of interest rates, the reduction of the supply overhang and the continued
sharp rise in residential rents.
2023
November 30, 2023 - ISSUE #46
INTEREST IN RESIDENTIAL REAL ESTATE IN GERMAN A-CITIES REMAINS HIGH
Interest in investments in residential property in major cities remains very high among institutional investors. This applies to both new builds and existing properties, according to the results of the Empira Institutional Trends 2023 survey of 81 investors conducted by consultants Bulwiengesa in June and July 2023.
October 30, 2023 - ISSUE #45
GERMAN PROJECT DEVELOPERS UNDER PRESSURE
German project developers are currently in difficult waters. Interest rates, construction costs and inflation have risen to a high level and have dramatically changed the general conditions on the real estate market. Recently, 25 real estate developers were interviewed in an anonymous survey by Quin Investment about the current situation. Among them were renowned companies such as GBI AG, Arcadia Investment, Art Invest and Profi Select as well as smaller and mediumsized developers.
September 28, 2023 - ISSUE #44
STUDY EXPECTS 30% DROP IN TURNOVER ON THE RESIDENTIAL
REAL ESTATE MARKET
Turnover in residential real estate is likely to fall by 30% this year to €149 billion, the German consultancy Gewospredicts on the basis of surveyor committee data. Bad news with regard to future new construction: the transaction volume in residential building land is likely to drop the most.
August 30, 2023 - ISSUE #43
RENTS ARE RISING FASTER IN BERLIN THAN IN ANY OTHER MAJOR CITY
Unbroken demand for residential space, a crisis in new construction, and a wait-and-see approach: Pressure has increased on the rental market in major German cities. This is shown by an analysis by Jones Lang LaSalle (JLL).
On average, asking rents in eight major cities climbed by 6.7% in the first half of 2023
July 28, 2023 - ISSUE #42
PERPSECTIVE FOR RESIDENTIAL REAL ESTATE INVESTMENT
According to CBRE and BNPPRE, Q2 2023 was even the weakest since 2011. The central reasons : Interest rate fears and pricing uncertainties. The number of residential units traded slumped by 73% to 11,900. On the other hand, the average purchase price increased by 22% to €3,400/sqm – mainly because high-quality residential complexes and portfolios were traded under ESG criteria, according to CBRE.
June 26, 2023 - ISSUE #41
KI FORECASTS RENTS OF €30 / SQM
May 31, 2023 - ISSUE #40
CONSTRUCTION COSTS RISE SHARPLY
In February of this year, the cost of new residential construction was 15.1% higher
than in the same month last year. The increase was thus somewhat lower than
last determined for November 2022: At that time, statisticians reported a 16.9%
year-on-year increase. Looking only at the three months from November 2022 to
February 2023, inflation was 2.7%.
April 28, 2023 - ISSUE #39
Immoscout: RENTS AND PRICES ARE RISING AGAIN
According to figures of the German real estate portal, asking rents for newly built apartments rose significantly more strongly than those for existing apartments in the first quarter. With an increase of 8.8%, Berlin not only recorded the highest price growth of all metropolitan areas, but also the highest price growth in a quarter since the start of the survey in 2007.
March 30, 2023 - ISSUE #38
FIRST DECLINE IN PURCHASE PRICES SINCE 2010
The last year-on-year price decline was seen at the end of 2010. According to preliminary figures from the Federal Statistical Office (Destatis) on the house price index, purchase prices fell by 5% compared with the third quarter of 2022. Lower demand due to increased financing costs and high inflation is likely to be responsible for the decline, according to Destatis. Purchase prices for detached and semi-detached houses tended to fall more sharply than for owner-occupied apartments.
February 28, 2023 - ISSUE #37
SURVEYORS SEE RESIDENTIAL PRICES DRIFTING SIDEWAYS
The Society for Geodesy, Geoinformation and Land Management (DVW) had invited the heads of the appraisal committees from Berlin, Hamburg, Düsseldorf, Cologne, Stuttgart, Munich, Frankfurt and Leipzig to a virtual exchange on the market situation. Those are the ones who know the prices have actually been paid. The appraisers assess the year 2022 quite similarly: In the first half of the year, markets went up, there were relatively many transactions and rising prices.
January 31, 2023 - ISSUE #36
Residential Investment Market: BROKERS EXPECT UPSWING
Last year, the residential investment market saw the lowest investment volume in ten years. The leading brokers expect that business will now start cautiously, but will pick up in the second half of the year when there is more clarity on interest rate developments. According to them, the topic of energy efficiency continues to gain in importance, and what comes from the legislature is also important.
January 16, 2023 - STRAUSBERGER PLATZ EDITION
SECURE THE LAST PIECE OF GDR IN THE PROJECT CENTRAL BERLIN
2022
SERVICED APARTMENTS ARE BACK
RISING INTEREST RATES CREATE MARKET TURBULENCE
Rising interest rates, exploding construction costs and ever more stringent energy efficiency requirements: this mix is making it increasingly difficult to finance housing developments and putting investors into a state of shock. The high transaction volume and hence following high demand for loans in recent years was mainly due to low interest rates.
BANK FINANCING SENTIMENT RUSHES INTO THE CELLAR
The financing markets are unsettled. The reasons include the sharp rise in interest rates and the uncertain economic outlook, which are triggering a mood of crisis. The German Real Estate Financing Index (Difi), compiled by JLL and the ZEW economic research institute, slumped by 51.7 points to -44.5 points in the second quarter.
BERLIN: 45% INCREASE IN SALES VOLUME OF MULTI-FAMILY HOUSES
Multi-family houses in Berlin continue to be highly sought after by investors. For 2021, according to initial estimates, the expert committee has recorded an increase of 44.9% in the transaction volume, which has risen to €7.46 billion.
TOKENIZATION - THE FUTURE OF RAISING CAPITAL FOR REAL ESTATE
BERLIN RENT CAP (MIETENDECKEL) SEVERELY REDUCED SUPPLY OF RENTAL APARTMENTS
INCREASED CONSTRUCTION CONSTS CAUSE STRONG PRICE-INCREASES FOR NEW APARTMENTS
RECORD TRANSACTION VOLUME ON THE BERLIN REAL ESTATE MARKET
RESIDENTIAL REAL ESTATE MARKET 2021:
WITH 21 TRANSACTIONS - HALF THE VOLUME
In November, the transaction volume on the investment market for commercial and residential real estate amounted to around EUR 7.6 billion. The rolling twelve-month volume at the end of the month was around €113.0 billion, up 0.5% on the previous month. In the last twelve months, 2,400 individual and portfolio transactions were recorded.