Strong Demand for Property and Floor Space Coincides with Shrinking Supply

Germany’s real estate investment market is going through a sustained peak phase – fuelled by the ECB’s sustained zero-interest policy and a high level of liquidity. There have been no clear signs of a turning point so far. There are admittedly first indications of deteriorating sentiment: Certain market barometers such as the Deutsche Hypo Real Estate Climate 1 and the Deutsche Hypo Real Estate Economy Index (REECOX 2) have for some time now suggested that the cycle has “passed its zenith.” Among many market players, however, the thirst for German real estate investments is far from quenched. Or so the latest transaction reports suggest. Yield rates continue to harden, and the investment volume in most asset classes is at a record high.