Sentiment Indicator for Commercial Real Estate Financing Remains in Negative Territory
DIFI Report by ZEW and JLL
In the second quarter of 2019, the German Real Estate Finance Index (DIFI) by ZEW and JLL decreased by 1.4 points to a current reading of minus 11.1 points, thus remaining in negative territory. The majority of the experts surveyed see no change in the financing situation, either in the past or in the coming six months. However, those expecting changes in the financing situation gave a predominantly pessimistic assessment. The sentiment indicator for commercial real estate financing is thus also reflecting the subdued economic development in Germany.
The experts’ assessments of the financing situation and expectations in the stationary retail sector, which have been declining almost continuously since the end of 2016, remain negative. Only with regard to the conditions on refinancing markets did the respondents give more positive – but nevertheless cautious – assessments. 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.
The German Real Estate Finance Index (DIFI)
The German Real Estate Finance Index (DIFI) reflects survey participants’ assessment of the current situation (including the previous six months) of and expectations (for the coming six months) for the commercial real estate financing market. It is conducted on a quarterly basis and calculated as the average value of the balances between the following segments: office, retail, logistics, residential properties and hotels. The balance for each segment is the difference between the percentage of participants who are optimistic and the percentage of participants who are pessimistic about the current state and future development of financing conditions in the German real estate market. The DIFI is a survey conducted and published by Jones Lang LaSalle (JLL) and the ZEW – Leibniz Centre for European Economic Research. 30 experts participated in the April/May 2019 survey.
