DIFI at a Record Low

The German Real Estate Finance Index (DIFI) by ZEW and JLL decreased once again in the fourth quarter of 2018 to a current reading of minus 10.8 points, falling to the lowest level in almost two calendar years. The experts’ considerably more pessimistic assessment of the financing situation was largely driven by the weakening economy in Germany. The survey participants gave an equally negative assessment of the future development of retail property financing.

The survey included a special question which asked about the determinants of price development as well as the development of the market values of commercial properties in the seven largest cities in Germany. The experts see the lack of investment alternatives in particular, but also persistently low interest rates, as the most important price determinants in the commercial real estate market. With e-commerce growing bigger and bigger and increasingly driving stationary retail businesses out of the city centres in recent years, the majority of respondents expect market values in this segment to fall slightly. These are the key findings of the DIFI Report, a quarterly survey on the commercial real estate financing market in Germany carried out by ZEW in cooperation with JLL.