To observers from outside the industry, the real estate market currently resembles a colorful vegetable market in an exotic country. The expertise of an insider can be helpful when making important decisions.
One important observer of the real estate markets is the international consulting firm Savills, which offers in-depth expertise on commercial and residential real estate in over 70 countries at . In a recent spotlight, the consultants take a look at the German real estate market.
According to the report, the German real estate market is undergoing a profound transformation. Although a new market cycle is just beginning after the end of the zero interest rate environment, it differs fundamentally from its predecessor. The two key messages are: First, there will be no new "super cycle." Second, the new cycle is beginning in a fundamentally different social and technological reality than the last one.
This will place completely new demands on active buyers in the real estate industry. The last real estate market cycle benefited from a unique combination of strong population growth, a flourishing economy, and falling interest rates, becoming what is known as a "supercycle." That is now over. In the new cycle, rental income will be decisive for investments. The differences between individual real estate locations and segments will become much more pronounced.
In addition, the new cycle is beginning in a social and technological environment that has recently undergone rapid change. Changing space demand and user requirements are polarizing the markets. ESG (environmental, social, governance) requirements, digitalization, home offices, online retail, and the use of artificial intelligence are increasingly shaping the real estate markets.
This change is increasing the demands on consulting and market analysis for owners and investors. Service is playing an increasingly important role. In general, the demands on owners and investors in the commercial real estate market are rising. However, owners who wish to invest in their private residential property will also benefit from good advice in the future.
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