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 COSTS 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.