ZEW DIFI Report Published - Financing Conditions for Commercial Real Estates Are Deteriorating
ResearchDuring the third quarter of 2012, the market participants’ expectations regarding financing conditions on the German real estate market have deteriorated. Compared to the previous quarter, the German Real Estate Finance Index (DIFI) decreased by 8.6 points and has thus reached its historic low of minus 26.7 points. These are the findings of the quarterly ZEW survey among real estate market experts concerning the real estate financing market in Germany. 41 experts participated in the August survey.
Especially the dampened assessment of the financing conditions of office, retail and logistics properties in Germany is responsible for the decline of the DIFI. The respective partial indicators decreased by 9.9 points (office properties), 18.8 points (retail properties) and 15.9 points (logistics properties). This development is accompanied by a still positive, but remarkably declining economic growth in Germany.
The financing conditions for residential properties, however, are rated comparatively favourable as they depend considerably less on the general economic development. Furthermore, the German housing market has proven to be stable and attractive on an international level. The respective partial indicator of the DIFI has increased by 10.5 points to a total of 5.2 points.
The German Real Estate Finance Index (DIFI)
The German Real Estate Finance Index (DIFI) represents the expectations of the participants in the survey concerning the real estate financing market on a six-month horizon. It is conducted on a quarterly basis and calculated as the average value of the balances between the following four segments: office, retail, logistics and residential properties. The balances of the segments reflect the difference between the percentage of participants who are optimistic and the percentage of participants who are pessimistic about the development of the financing conditions on the German real estate financing market. The share of those who estimate unchanged financing conditions is not taken into consideration for the calculation of the balance.
