Around 71% of German real estate professionals do not believe that the industry's 'dry spell' is over yet, according to Berlin Hyp’s most recent Trendbarometer.
The real estate bank's survey of more than 200 real estate professionals found that 8% expect the situation to take a further turn for the worse, while 21% believe the markets have hit rock bottom and that things can only get better.
Megatrends and headwinds
On top of the present market malais prompted by macroeconomic headwinds, the survey focussed on the effects of megatrends such as demographic developments, digitalisation and urbanisation.
The reseach found that professionals believe that the real estate industry must address a number of challenges in order to ensure a successful turnaround that lasts.
These include climate change, an ageing society, increased migration into cities, changed consumption habits and rapid technological progress.
In response to the question, 'how would you describe the level of the industry’s willingness to change?' around 42% rate the industry's 'willingness to change' as 'rather high'; while 53% deem it to be 'rather low'.
Present and future risks
Interest rates, inflation and higher construction costs have been the focus of discussion in the real estate industry of late. However, further risks also persist on top of these, which are possibly being neglected in light of the crisis.
The professionals surveyed identified these risks as the 'shortage of skilled labour caused by a brain drain and demographics' (61%), followed by the risk of 'the development of infrastructure for renewable energy progressing too slowly' (52%); 'refinancing risks and equity gaps' (51%) and 'decline in employment in the construction industry' (42%).
Commented Sascha Klaus, chair of the board of management of Berlin Hyp: 'We now need to address not only current issues such as interest rates and inflation, but also the more extensive industrialisation of the construction value chain, making processes faster, less expensive and more flexible.
'Furthermore, we have to seize the opportunities offered to us by the energy transformation, for example. In this regard, investment in our country’s energy infrastructure is just as urgently needed as investment in the existing properties themselves, if not even more urgently needed. It is thus no longer possible to view infrastructure and real estate as two separate things.'
Finally, digitalisation remains a hot topic for the real estate industry. Real estate professionals rate 'building information modelling' (55%), 'artificial intelligence' (43%), 'cloud technologies' (31%) and the 'internet of things” (31%) as particularly relevant for the industry’s future.
