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Lending business

DZ HYP on The German real estate market 2023/2024

At the beginning of October, DZ HYP published the study “Real Estate Market Germany 2023/2024”. Now into its 16th edition, the study analyses the development of the commercial real estate markets (office, retail, residential) in Germany’s seven top locations. Germany’s weak overall economic development is also having an impact on the real estate market, which was still flourishing until the beginning of 2022.

In addition to rising interest rates and structural obstacles such as bureaucracy, demographics and energy prices, the industry is particularly concerned with changing space requirements, primarily in the wake of e-commerce and growing home offices. At the same time, considerable funds must be invested in the energetic modernisation of buildings. Nevertheless, commercial real estate markets continue to offer potential.

The residential markets in the top locations are under great pressure. The demand, which will increase again in 2022 due to high immigration from Germany and abroad, is hardly matched by freely available flats. In addition, numerous new construction projects have been stopped as a result of the increased construction and financing costs. As a result, completion figures are likely to fall noticeably from 2024 onwards. In addition, due to the rise in interest rates, many prospective buyers are no longer able to finance the purchase of a property, thus further increasing the demand for rental flats. The accelerated rise in rents for new leases will further widen the gap to existing rents, making relocation increasingly unattractive.

The DZ HYP-study “Real Estate Market Germany 2023/2024” is also available for download on the left hand side.