ZEW DIFI Report – Demand for German Real Estate Continues

The sentiment concerning the financing conditions at the German real estate market for the six months to come have improved slightly during the second quarter of 2012. The German Real Estate Finance Index (DIFI) currently levels at minus 18.1 points, thereby exceeding the previous quarter’s figure by three points.

Despite the improvement, however, experts still take a skeptical view towards the financing conditions. These are the findings of the quarterly ZEW survey among real estate market experts concerning the real estate financing market in Germany. 40 experts participated in the survey in May.

The current survey also shows that the financing conditions at the German real estate market have improved significantly during the last six months. Especially for office properties, the situation has brightened up, as the increase of 47.5 points illustrates. Currently showing 2.8 points, the balance is within the positive range for the first time.

Among other factors, the still quite solid economic situation in Germany, compared to other European countries, has likely contributed to the slightly improved sentiment among the experts. There are, however, risks due to the still persistent state debt crisis within the eurozone.

The finding of the special question of the second quarter of 2012 shows that German real estates are currently still rated high among German and international investors. According to the surveyed real estate market experts, this development will continue during the next twelve months. Especially with residential properties, more than 68 per cent of the surveyed experts expect a still increasing demand. Some 25 per cent of the experts expect an increasing demand for office, logistics, and retail properties in Germany, too. At the same time, however, between 59 and 69 per cent of the survey participants expect no significant changes of the demand situation within this market segment.