The effects of the corona pandemic on the German real estate market are still not really noticeable. Only prices on the office market seem to be falling – right?
The corona pandemic has been the top media topic for almost a year. Fluctuating stock exchange prices, massive short-time work and working from home have left their mark. Only the real estate market seems to have found its vaccine since the beginning of the Corona crisis, because it is still largely immune to the virus.
More and more office space is empty
The market for office space is currently still the worst hit by the corona pandemic. The real estate specialist NAI Apollo estimates that the vacancy rate in Frankfurt will rise to around 7.8 percent or 900,000 square meters. As could be heard at a conference of the Frankfurt Economic Development Corporation and the project developer ABG, vacancies rose by around 30 percent compared to the end of 2019, writes ZEIT ONLINE.
By contrast, the demand for premium office space is stable worldwide. According to JLL’s “Premium Office Rent Tracker”, rents in this segment fell by just three percent. With Berlin, Munich and Frankfurt, three German cities are still among the top 50 most expensive office markets in the world.
Residential property prices continue to rise
While the slogan “Always dies” remains valid for undertakers, the slogan “Will always be used” is still relevant for the real estate market. Because prices keep rising.
According to the figures of the Federal Statistical Office, the prices for residential real estate in the third quarter of 2020 averaged 2.6 percent above the second quarter of 2020. Compared to the third quarter of 2019, this corresponds to an increase of 7.8 percent. Despite the Corona crisis, the prices for residential property are rising as much as they were in the fourth quarter of 2016. At that time, the increase was a full 8.4 percent compared to the same quarter of the previous year.
Different prospects for restaurants, storage areas or holiday properties
The real estate market is still reacting very robustly to current developments, but it is still not clear whether it will stay that way. Investors should be vigilant, especially in the hotel, restaurant and retail sectors, as greater risks can be expected here. The demand for warehouses and space is likely to remain stable.
Due to the travel restrictions, holiday properties in Germany have also sparked new interest. Quiet areas in the mountains and by the sea are particularly popular with investors.
There also seem to be no major problems on the German construction sites. The temperature index of the baumonitoring.com network did not increase during the second lockdown and was 37 degrees in mid-December, a slight decrease compared to the previous week. Around 900 actors from the real estate industry were surveyed, who can move on a scale between 36.5 and 41.5 degrees. It remains to be seen whether feverish temperatures can be expected in the Corona Real Estate Index in 2021.
Image sources: telesniuk / Shutterstock.com