For the current year, the majority of surveyed market participants anticipate transaction volumes will largely stagnate, Florian Schwalm of EY Real Estate said on Wednesday. "The real estate spring is still a long time coming," he concluded. While rising prices are expected for residential properties, the sector remains concerned about office buildings and shopping centers in less favorable locations. Respondents do not foresee any relief for the housing construction crisis, citing that the reforms implemented so far lack sufficient impact.
The real estate sector, long accustomed to success, slid into crisis in 2022 and 2023 due to rapidly rising central bank interest rates, soaring construction costs, and falling property prices. Major real estate companies were forced to sharply devalue their portfolios and sell off apartments to reduce their debt burden. Now, with interest rates having fallen, the situation has shifted once again. "After three years of stagnation, we are now growing again with strong momentum," said Germany's leading residential property company Vonovia, which specializes in the housing sector.
(Reporting by Matthias Inverardi, edited by Myria Mildenberger. For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).
