Sentiment in the German real estate market is darkening in the wake of the current crisis afflicting the euro, according to the latest market survey from property adviser King Sturge.
Sentiment in the German real estate market is darkening in the wake of the current crisis afflicting the euro, according to the latest market survey from property adviser King Sturge.
The firm’s latest Real Estate Climate index saw confidence fall for the second month in a row during September, down to 126.9 index points. The drop of 6.4% from the 137.1 index points registered in August highlights an increasing reluctance on the part of firms to embark on large investments.
For the second consecutive month, sentiment deteriorated across all real estate sectors. The steepest percentage fall was recorded in the Industrial Climate index, with investment hopes for the sector dropping 14.7%.
The Office Climate index also registered a steep loss, dropping from 124.5 to 112.1 index points month-on-month, a percentage fall of 10%. While sentiment remained in the positive range, the 1,000 participants polled expressed a sober view of future growth prospects.
Market players once again rated residential real estate with the highest score. The Residential Climate index held broadly steady at 162.4 index points, a fall of just 1.8%.
Jones Lang LaSalle research head Helge Scheunemann suggests the findings show the German real estate market is finally feeling the effects of the euro debt crisis. 'The sense of unease is plausible not only because the macroeconomic parameters in Germany have noticeably deteriorated, but also because the experts are divided in their predictions regarding the further economic trend,' she said.
