Market in Minutes Investment Market Germany

Fewer transactions than at any time in more than ten year

• While we were still cautious in our interpretation in view of the weak April, with a view to the May figures there is now hardly any doubt that the steep rise in interest rates and possibly also other negative factors, such as the lower economic momentum coupled with high inflation, have at least temporarily led to significant distortions on the German real estate investment market. In the past month we registered less than one hundred transactions - this was last the case in March 2011. After April had already marked a long-term low, this has now been clearly undercut once again.
  
  
• The transaction volume proved to be much more robust, but was also below average. Commercial real estate accounted for 2.5 billion euros (5-year average: 5.5 billion euros), residential real estate for 0.9 billion euros (5-year average: 2.1 billion euros). Consequently, the transaction volume of the last twelve months also declined and now totals 116.3 billion euros for commercial and residential properties (- 2.8 % compared to April).
  
  
• We stand by our assessment formulated last month that the low transaction activity represents a temporary adjustment reaction to the changed (interest rate) environment. However, in view of the high number of halted and protracted sales processes, we expect only a few transactions and correspondingly low turnover in the coming months. However, this also means that transactions are piling up and we expect activity to return to normal later in the year with prices then likely to be lower.