The market is recovering – slowly

After more than 2 years of falling prices, the real estate market now seems to have bottomed out.

Even if some project developers are still sitting on expensively purchased properties at latent risk of insolvency: The prices for apartment buildings have stabilized and the housing shortage is causing rents to rise at the same time. The trees are not growing to the sky, but at least the demand for existing properties is increasing. Light industrial properties are also increasingly coming into focus for investors.

An indicator of the growing confidence in the real estate industry is the development of the shares of Vonovia, Germany’s and Berlin’s largest private property owner and apartment landlord. After its crash in 2022, the value more than doubled, and the majority of analysts now see further potential for growth.

Union Investment boss Hans Joachim Reinke also noted this in his interview with the Börsen-Zeitung.
https://www.fondsprofessionell.de/news/produkte/headline/wohnimmobilienfonds-union-investment-chef-macht-anlegern-hoffnung-235095/

New residential construction remains a problem child; given high construction prices and interest rates that are still too high, the newly created degressive depreciation has not yet had the desired effect.

“For the last four months of the year, I expect two further, slight interest rate cuts of 0.25% each, which should give investors further encouragement for the coming year. The time to get started has begun.”

RHEact now!

Delano Kyles · CEO & Managing Partner