Real estate investment turnover rose by 27% in Germany last year, to €35.2 billion, new data from BNP Paribas Real Estate has revealed.
According to the data, the strongest increase was seen in the area of residential investments (of 30 units or more), which grew by close to 78% to around €9.3 billion.
Residential investments also accounted for the highest share of total investment volume last year, at 26%.
‘Significant market recovery’
“The significant market recovery in the residential sector is particularly noteworthy,” commented Marcus Zorn, CEO of BNP Paribas Real Estate Germany. “This suggests that investors continue to view the medium and long-term prospects of the German housing market positively. The increased sales volume is not least due to the further increases in rental prices since the beginning of the year.
“In conjunction with falling key interest rates and thus also financing costs, we can expect purchase prices to rise again, which was already evident in the high-quality new construction segment in the final quarter. The resulting potential for value appreciation is making residential investments increasingly interesting for investors again.”
Commercial real estate
In terms of commercial real estate investments, the increase was significantly lower, at just under 15%, with sales totalling €25.9 billion. More than three quarters (76%) of commercial real estate turnover came from individual deals.
While commercial real estate reported a positive year, nothing can be taken for granted given the challenging economic environment in Germany at present, Zorn added.
“For the year 2024 as a whole, GDP development is expected to be in the region of zero growth,” he said. “A slight recession is also not yet completely ruled out.
“Nevertheless, investors’ confidence in the long-term development of Europe’s largest economy has increased. Above all, the prospects and potential for value appreciation play a decisive role here and are making real estate investments increasingly interesting again.” Read more here.
