E&Y: German prime property prices to remain stable

The prices for premium properties in Germany are set to remain stable this year, Hartmut Frund, CEO of Ernst & Young RE Germany told PropertyEU TV at MIPIM.

'However, prices for less high-quality properties or properties in secondary locations are likely to fall by between 5% and 10% in value this year,' he added. The underlying rental indicators and supply and demand are solid on the German real estate market, Frund said.

'Demand is increasing, rents are rising slowly and vacancy rates are fairly low. This is all keeping the market reasonably stable,' he noted. 'Of course, when you have a market that has gone off the boil and is still considering where it wants to go, sellers are still asking prices that are a few months out of date, and buyers are trying to talk the market down, it takes a while for the market to balance out,' he said. 'But we expect to see a good level of smaller portfolio sales continuing, although we’re unlikely to see a lot of large transactions in the near future, partly due to the lack of ready financing.'