Residential Dashboard

Key Takeaways

1. Conditions on the capital markets have fundamentally changed in 2022. Significantly increased financing costs, soaring construction expenses, further increases in the price of land, strong growth in energy costs and high inflation mean a mixed bag of new challenges for all market participants.

2. The weakening demand in the owner-occupier apartment market is reflected in significantly declining volumes of mortgage loans to private households as well as steadily declining building permits and construction order books over the course of the year.

3. For many average private households, there is no alternative to renting, at least in the new-build segment. The purchase of new-build apartments is no longer affordable for households with average purchasing power (and little equity).

4. Sharply increased construction costs and further rising land costs imply an economically viable rent for project developers is significantly higher than the 2022 asking rent in A-cities.

5. Excess demand in the rental housing market will continue in the medium term due to ongoing population growth and increased financing costs. Rents are likely to continue to rise, albeit more differentiated by region, location, and segment than in the past.

6. Stable cash flows and foreseeable potential for rent increases continue to make apartments very attractive assets.