NEWSLETTER

2024

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

In the past twelve months, Prea has registered an increase in rental prices in the existing stock (year of construction 1945 to 2014) in 124 of 127 major and larger German cities surveyed in categories A to D. The increase in rental prices is expected to continue in the coming years. Growth in all city categories exceeded the average of the past ten years.
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

The move-in free, high-quality furnished apartment at Strausberger Platz in the CENTRAL BERLIN project is not just any property. It is a unique collector’s item that does not exist a second time in this form. It is the last purchasable unit in the listed building and at the same time the chance to secure a piece of the former GDR. Because together with the monument authority, attention was paid to a detailed and loving restoration.

2022

SERVICED APARTMENTS ARE BACK

The recovery from the corona shock seems to have succeeded faster than hoped in the serviced apartment segment. This is indicated by the latest results of a survey conducted by consultant Apartmentservice.

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

Real estate tokenization is the new buzzword in real estate finance. For project developers and investors, this new trend is a real boon. This is because tokenization allows real estate to be chunked into any number of digital shares.

BERLIN RENT CAP (MIETENDECKEL) SEVERELY REDUCED SUPPLY OF RENTAL APARTMENTS

The supply of rental apartments in Berlin has collapsed by up to 60% due to the rent cap (Mietendeckel) and remains at this level after its abolition. This is the result of a new study by the ifo Institute. Already after the announcement of the rent cap, the supply of apartments in Berlin fell sharply.

INCREASED CONSTRUCTION CONSTS CAUSE STRONG PRICE-INCREASES FOR NEW APARTMENTS

The new construction prices offered for residential real estate in Germany’s ten largest cities climbed by up to 19% last year. At the same time, according to an analysis by Immoscout 24, increases of up to 20% were also recorded for owner-occupied homes in the surrounding areas.

RECORD TRANSACTION VOLUME ON THE BERLIN REAL ESTATE MARKET

After the Corona dip in 2020, Berlin’s real estate trade once again achieved record levels. According to the preliminary evaluation by the Gutachterausschuss für Grundstückswerte (GAA), the transaction volume in 2021 was €23.8 billion, higher than ever before.

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.

GERMAN REAL ESTATE: THE COMEBACK OF INTERNATIONAL CAPITAL

The transaction volume on the German real estate market was a whopping 111 billion euros. According to JLL, this represents an increase of 36% compared with 2020. This new all-time high impressively documents the attractiveness of German real estate across all types of use, with residential investments clearly dominating, of course. The signs are good that this trend will continue. This is because international investors have so far held back during the pandemic years. That is likely to change in 2022.