Real estate

Analyses of the situation in the construction sector and studies on the real-estate market both in Germany as a whole and in selected centres in Germany and abroad.

May 3, 2023

History tells us: Housing markets do offer inflation protection

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We showed in March that, in Germany, house prices have kept up with inflation during periods with high inflation and that, over decades, house prices have increased even faster than consumer prices. Here, we extend the analysis to other countries. [more]

April 21, 2023

2023 Housing market outlook: Price dip and interest rate peak ahead. Significantly higher prices likely in the long term. Refurbishment costs are taken into account

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The boom is over. Five key arguments lead us to expect only a price dip. Negative real interest rates, inflation protection through real estate, rising rental growth and most importantly a high fundamental supply shortage. In addition, real house prices have already fallen very sharply due to the surge in inflation. CO2 emissions from buildings are increasingly coming into focus. Prices have started to diverge between properties with low and high emissions. This divergence is likely to increase. [more]

March 10, 2023

Housing market could create a catch-22 for the ECB

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Fighting inflation is high on the ECB’s agenda. If inflation remains elevated, additional rate increases could pose challenges in the housing markets. Given their size and importance, this would likely have ramifications for macro-financial stability. [more]

March 9, 2023

The German economy – one year after

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Germany

Focus Germany

Topic:

Banking and financial markets, Economic and european policy, Macroeconomics, Real estate, Sectors and resources

Analyst:

Eric Heymann, Jan Schildbach, Jochen Moebert, Marc Schattenberg, Marion Mühlberger, Sebastian Becker, Stefan Schneider, Ursula Walther

The German economy – one year after. With surprisingly strong hard data for January, chances are rising that GDP might be saved from another decline in Q1. Although not yet our baseline call, this would prevent Germany from going through a technical recession. However, still heightened uncertainty and real income losses due to high inflation will likely keep investment spending and private consumption flatlining in the first half of the year. Hence, we maintain our 0% forecast for 2023 German GDP growth, although upside risks have increased since the start of the year. [more]

March 1, 2023

German housing market: History suggests it is an inflation hedge

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We calculate a nominal and real return triangle for German house prices from 1970 to 2022. The market offered an inflation hedge in the past. This is in particular true for periods of high inflation as in these periods house prices even exceeded inflation. The huge supply shortage and rising rents are further arguments for a bottoming out of house prices in 2023. [more]

January 12, 2023

Outlook for global house prices

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International

Podzept (Podcast series)

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Real estate

Analyst:

Adrian Cox, Jon Bell, Michael Hsueh

House prices are cooling off around the world after the boom years of historically low interest rates and a pandemic race for space. Countries like Sweden, Canada and Australia, which had the biggest gains, heaviest household debt and highest proportion of variable rate mortgages, are most exposed. In the latest episode of Podzept, Michael Hsueh, FX Strategist and author of the G10 Housing Monitor, Jon Bell, Head of the European Construction and House Building Research, and Adrian Cox, Thematic Strategist, discuss the outlook. [more]

December 19, 2022

Outlook 2023/24: New global realities

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Germany

Focus Germany

Topic:

Banking and financial markets, Economic and european policy, Macroeconomics, Real estate, Sectors and resources

Analyst:

Eric Heymann, Heike Mai, Jan Schildbach, Jochen Moebert, Marc Schattenberg, Marion Mühlberger, Sebastian Becker, Stefan Schneider

We look at the expected recession in the winter half-year 2022/23 and the onset of recovery, how inflation will peak, while the labor market loses momentum and private consumption is hit by the loss of purchasing power. Construction and Capex spending are set to deteriorate. Fiscal policy continues to lean against the headwinds but should normalize somewhat. Loan growth, both with corporates and private households, may slow substantially. In a medium-term perspective, we discuss risks for the manufacturing industry and Germany’s geopolitical and competitive position. [more]

August 12, 2022

Residential market: A breather rather than the end of the price cycle

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Rising mortgage rates and shortages of building materials led to a shock of uncertainty in the housing market over the last months. But there are many countervailing effects. Hence, it is not set in stone that the house price cycle comes to an end. [more]

June 29, 2022

Construction industry: Uncertainty shock subsides

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In the last months the strong headwinds for the construction industry are expected to ease as commodity prices fall and material and labor shortages begin to decline. [more]

May 10, 2022

Outlook for the German residential property market 2022 and beyond. Base case: Rising overvaluations, end of the cycle in the near future, subdued price corrections

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We expect the German residential property market cycle to come to an end during the current decade. A combination of our different approaches suggests that, despite the uncertainties, the cycle will probably end in 2024. Prices will not necessarily undergo a massive correction from their peak, our baseline scenario foresees an isolated ending of the cycle. As migration inflows were low and new construction activity has been dynamic during the pandemic, fundamental supply shortages are a thing of the past for many German cities. The current refugee wave will only temporarily weigh on the market. [more]

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