No crash in sight – unless politics interferes
No decline is predicted for German residential and commercial real estate in the next two years, despite enormous price increases. This view is held by nearly all of the companies surveyed for the Immobilienscout24 Real Estate Index, drawn up by the Cologne Institute for Economic Research (IW). 90% of those surveyed see the probability of a 20% drop in prices in the residential sector as being low to minimal. Just 4% give it a high probability, and 6% see it as 50/50. The same goes for the office segment; the probability of a crash in the retail segment is rated somewhat higher. According to IW, politics poses the largest risk of causing decline in the residential real estate market, for example if rent controls should be tightened after the German elections. Meanwhile, the overall index for the current situation grew in comparison to the last quarter (+2.6% to 88.5 points). Expectations for the coming twelve months have also continued to look up (+7.9%), most strongly for office real estate (+20.7%).
source: TD News International from 9/15/17