BERLIN-The German Real Estate Climate index developed for realtor King Sturge reached an all-time high in October, up by 8.5% from September, buoyed by upward corrections of growth, falling unemployment, and great optimism in the real estate sector.
The upsurge is linked to yield expectation, reflecting rent and income developments, which rose by 9.2%, with the investment climate up by 7.7%. “We are happy about the positive trend that is not only ‘felt’ but also substantiated, but we would like to caution against exaggerated expectations,” said King Sturge Germany’s Managing Partner Sascha Hettrich. “It is much too early to speak of a boom in the real estate industry. We are rather looking at a successive return to ‘normal’ levels.”
Great expectations are focused on the office, which saw a 12.8% climate increase and reached its highest level ever. The commercial and industrial climate also improved, though residential fell by 0.7% - even though specialists still rate housing as the most secure segment and say lack of confidence from the financial crisis has finally been overcome. “The economic development in Germany is currently very dynamic in terms of growth rates,” said Hettrich. “At the same time, it is very dependent on events on the global industrial and financial markets. On this scale, fears of a cooling economy in the US, China and European debtor countries are growing. The aftermath of the crisis is not yet overcome.”
Allan Saunderson is a managing editor of Property Investor Europe and a contributor to GlobeSt.com.
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