ZIA offers glimmer of hope for Germany’s real estate market
There are increasing signs of recovery, although slight, for real estate in Germany, according to the ZIA, the country’s property federation, in its latest sentiment indicator for spring.
“It is still too early to talk about a turnaround in the mood,” said Prof Dr Michael Voigtländer from the Institute of German Economics. “Expectations are still too clouded for that. Nevertheless, the results show that the industry assumes that the worst phase of the recession is over,” he said.
Expectations of better financing conditions are likely to have a particular impact on sentiment. “Ultimately, the decline in inflation suggests that key interest rates in the Eurozone will also fall this year,” said Voigtländer.
The sentiment survey revealed that prospects in all sectors are more promising. The office index stood at 8.7, significantly up on the first quarter result. However, sentiment was the most positive about retail property, with the sector index at 17.4, up 9.7 compared to the winter quarter with future expectations also improved by 4.4 points.
Meanwhile the residential index increased 2.5 points to 15.7 while development, especially affected by the current crisis, is now looking more positive, the ZIA stated. Although the current business situation for development is still rated poorly at -27.6, this was significantly better than in the previous quarter and was a +24.6 points improvement.
The index also revealed that 52.8% of respondents expect the number of deals to increase slightly this year. The biggest increase is expected for residential properties (57.6%), followed by logistics properties (20.2 percent).
“The path through the dark tunnel is still long, but we are finally seeing light again,” said ZIA president Dr Andreas Mattner.