Residential Dashboards

Key Takeaways

1. General conditions on the German residential investment market improved somewhat in the first half of 2024. High financing, construction and land costs continue to create a challenging market environment for many of those involved. However, the ECB’s first interest rate cut, gradual acceptance of the new situation by buyers and sellers and healthy fundamentals in terms of supply and demand helped spur a clearly favourable trend on the German residential investment market in the first half of the year.
2. Fundamentals around demand, which were already sound, are also being boosted by additional demand from refugees coming from Ukraine as a high number appear to be remaining in Germany. This, in turn, is creating additional demand, which is currently facing weak supply particularly in the country’s conurbations.
3. Population, especially in the country’s top 7 cities led by Berlin, has grown at a much more rapid pace over the past 10 years than in other parts of the country. This can be seen in the strong momentum behind the upward rent price trend in the country’s major cities.
4. More and more furnished apartments are being listed, particularly in the highly sought-after small apartment segment, a development that can likely be explained by additional demand for temporary living space and lower regulatory requirements.
5. Rent prices are likely to continue their lively growth trajectory, even against the backdrop of potentially sluggish new residential construction completion rates in the years to come. In addition to offering the advantage of cash flow stability, this trend is a solid argument for investing in German residential real estate.