In the face of numerous risk factors – from rising interest rates and the war in Ukraine to high energy prices and the threat of recession – the German real estate market is proving robust overall. Nevertheless, according to a DZ HYP-study the environment for real estate investment has changed noticeably since the beginning of the year.
The individual asset classes have developed in different ways. The office market has picked up again after the corona-induced weakness. However, the weakened economic outlook is now likely to slow this momentum despite short supply. In the retail sector, the decline in rents seen over a number of years was halted thanks to an upturn in letting activity, but in view of the declining purchasing power of private households, rents are likely to give way again at the turn of the year 2022/2023. In the residential market, first-time rents in the seven top locations rose by an average of around 3.5 percent by the middle of the year, the first time in a long while that they rose slightly less than consumer prices. This was due to stagnating population figures and an improved supply of new construction. The outlook is characterized by the tension between heavily burdened private households, a lower growth of the housing stock due to reduced new construction, and increasing demand for housing due to the population growth figures, which are now slightly rising again.
The DZ HYP-study “Real Estate Market Germany 2022/2023” is also available for download as a PDF on the left hand site.