Purchase prices stagnate at a high level

Our Zinshaus market report

The regionally divergent property price trend offers opportunities

Real estate bubble? Under the current economic conditions, none is detectable

Notable declines in prices and rents are not predictable in the real estate cycle. In the largest Zinshaus market – Germany – employment, the economy and incomes continue to rise. Both in existing and in new construction, the markets are foreseeably constantly oversubscribed. Despite increasing regulation, the sustained growth in housing demand is causing rents to rise steadily. An interest rate reversal in Europe is not expected for a long time. Lending (debt capital ratio) in Germany is fairly moderate and subject to strict rules. Only in the area of owner-occupied property (condominiums and one or two-family houses) do we see dangerous tendencies due to rising purchase prices in relation to rent increases. The situation could worsen with a sustained interest rate hike coupled with a recession/economic slump. But a turnaround is currently not in sight.

Many investors are taking advantage of the stagnant price levels in the top cities for profit-taking and reinvestment in more promising locations

Not only should positive value and rental price developments – and the chance to make attractive real estate investments – be associated with major metropolitan areas and their districts: Today, opportunities in economically prospering regional centers and university locations also beckon. By contrast, in parts of the country that are more purely rural, falling demand and decline in rent levels are currently causing an occasional sharp drop in prices.

Large sums of money continue to flow into the Zinshaus market, influenced by the persistently low level of interest rates, among other things. Locally-oriented private investors are competing with supraregional as well as international investors, increasingly forcing them also to engage across borders if they want to achieve acceptable investment returns. This is fueling stagnation in the real estate markets of top cities (Hamburg, Berlin, Dusseldorf, Cologne, Frankfurt, Stuttgart, Munich, Vienna, Zurich) at high price level and widely varying rates and rent increases in regional centers. Many investors are taking advantage of the high price levels in top cities for profit-taking and reinvestment in potentially more lucrative locations.

In Germany, larger housing stock sales (more than 30 residential units) rose again year-on-year.


Current discussions about tenant protection development are not an additional investment incentive, but no deal breakers as well.

The transaction volume with larger housing stocks (from 30 residential units) has again increased year-on-year. In total, 2019 German Zinshaus portfolios changed hands for around 19.5 billion euros, a 20 % increase over 2018.

Various studies show that foreign investors placed less capital in the Zinshaus market in 2019. This was not due to the lack of interest – Zinshaus properties continue to be considered a safe haven despite increasing regulation – but rather because local investors act faster and thus are more frequently win the bid. According to a BNP-PRE study, domestic investors dominate the German residential investment market. For example, 91.5 % – more than three quarters – of the volume is attributed to German buyer groups.  The investment volume of foreign investors amounted to 1.7 billion euros, of which about 54 % came from the European Economic Area.

In 2020, Zinshaus investments will again be among the most popular real estate assets

Both in the portfolio and in the new building segment, the Zinshaus property market offers interesting opportunities for a large number of investment strategies that focus on stable, long-term cash flows. Also in 2020, Zinshaus investments should be among the most popular real estate assets. Although the supply side remains bottlenecked (making reliable sales forecasts difficult) a clearly above-average result should still be possible.

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