King Sturge Real Estate Economy Index compiled monthly in Germany has gone up again in June despite the deep recession.
King Sturge Real Estate Economy Index compiled monthly in Germany has gone up again in June despite the deep recession.
In its latest survey, the sentiment indicator improved by 6%, from 55.6 up to 58.9 index points. King Sturge said the positive trend of the Real Estate Economy Index was supported by all the indicator values surveyed. In addition to the Investment Climate, which rose by 8.7% to 61.3 points, and the Office Climate, which rose by 15.3% to 38.4 points, Rental Climate, Retail Climate and Residential Climate all registered gains.
Even the Real Estate Economic Situation, based on macroeconomic fundamentals such as DAX, Ifo, DIMAX, and interest rates, perked up for the third time in as many months. At 130.6 points, the June index exceeded the previous month’s index by 2.6% (127.3 points). In strictly technical terms, this would qualify as a shift in trend. The Real Estate Economy Index is compiled by the independent consulting agency BulwienGesa on behalf of King Sturge once a month.
'The cautious but sustained optimism in the industry in regard to the future development of the real estate markets mirrors the hope that the most severe economic crisis in 60 years has bottomed out, and that the economic situation will stabilize by fall. The optimistic findings of the Real Estate Economy Index match those of various other positive sentiment indicators in the economy, including the latest Ifo business climate index or the ZEW index,' said Sascha Hettrich, managing partner of King Sturge Deutschland.
He went on to say that the renewed substantial increase of the Investment Climate from 56.4 to 61.3 index points suggests that many respondents evidently feel the time has come for an anti-cyclical entry into the real estate market. 'What matters now is that the cautious optimism gets all the backing that government and financial industry can muster. A sustainable recovery will be quite impossible without a relaxation of the financial markets,' Hettrich added.
