The real estate investment market in Germany experienced a significant decline in 2023. The transaction volume was the lowest since 2011. Despite this slump, the investment climate is slowly brightening and a certain recovery is expected. This is according to the "Trendbarometer 2024" study by Ernst & Young (EY). A quarter of respondents continue to expect a decline, while 45% predict a sideways movement and a third predict an increase in market momentum.
Study author and Managing Partner of EY Real Estate Florian Schwalm points out that although the market has stabilized, it has not yet fully recovered. "Unfortunately, further insolvencies along the value chain are anything but unlikely. This in turn will put further pressure on market prices in the real estate asset class. 2024 will be the year of restructuring," says Florian Schwalm.
There are still problems in the area of new residential construction and office properties. More apartments are needed than are being built. Investors expect prices for office properties to continue to fall. According to EY, however, there is also good news. Stable or rising prices are expected for high-quality residential properties in very good locations. The investors surveyed by EY also expect prices for logistics properties to remain stable.
Source: ey.com
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