Confidence is rising, but high office prices strain business

14/12/2018

According to the real estate index compiled by the Cologne Institute for Economic Research (IW Köln) and the real estate online platform Immobilienscout24, German real estate companies are rating business in the fourth quarter as slightly weaker than in the previous quarter. However, at 82 points (-3.7) they are still very good figures. The outlook for the coming year has meanwhile improved, particularly among project developers. The reason for this could be the good signals from pre-sales and pre-letting, according to the Cologne Institute. Expectations also rose – albeit very slightly – in the office and residential segments, while a surprising drop was seen in the assessment of the office segment. Here, the number of those who intend to continue buying has declined, while prices are expected to continue to rise. A reason for this decline may be that prices have now reached heights that make acquisitions more difficult and burden the business situation. Almost everyone, meanwhile, expects further growth in the coworking sector, with only 1% anticipating a decline.


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