1,880 participants of Europe’s biggest property trade fair took part in the third EXPO REAL barometer of opinion and paint a true picture of the mood in the real estate industry. Apart from Brexit, interest rate policy and housing, the topics also include amounts invested, major influencing factors and popular investment locations.
“For the most part, the European real estate industry expects good results again for 2019. That is verified by our survey, which we held in July. These expectations are also reflected in the high participation in EXPO REAL”, says Klaus Dittrich, Chairman & CEO, Messe München. “At the same time, the Brexit chaos is unnerving and we see that the policy of low interest rates polarizes opinion. In our conference program, these subjects—as well as the development of the global economy and international politics and the effects on the real estate industry—will be up for discussion.”
79 percent of respondents expect a rather good result for their companies in 2019, 14 percent even anticipate a record year. Germany is still regarded as a safe haven. For the most part, the property professionals think the amounts invested here will continue to rise (55 percent) or remain the same (38 percent). With regard to the EU (excluding Germany), 44 percent still reckon with a further increase and 47 percent with the same level. Only for the UK does the pendulum swing in the other direction: 62 percent of respondents assume the amounts invested there will drop, 29 percent reckon with the same amounts.
The chaos of Brexit is clearly making itself felt in the real estate industry. 19 percent of the property professionals surveyed feel the chaos of Brexit in their business, around one third have adjusted their investment strategy. 20 percent reckon with massive consequences for their business in the event of a no-deal Brexit.
The evidently permanent policy of low interest rates polarizes opinion: one half of the respondents regard this development as a blessing, one half as a curse.
The respondents assess these influencing factors as particularly decisive for the real estate sector in Europe: affordable housing (57 percent), interest rate policy (53 percent), shortage of space (49 percent), shortage of skilled labor (45 percent), digitization (39 percent), big liquidity squeeze among international investors (38 percent) and climate change/protection (37 percent).
Affordable housing is right at the top of the agenda in the real estate industry and politics. 52 percent of respondents think the market and private companies are less and less capable of solving societal problems. 75 percent recommend cooperating more intensively with local authorities and politics. As many as 39 percent would support expedient regulation in this area—and 7 percent will be investing more strongly in office property because of the heavy regulation for residential property.
In the respondents’ opinion, these are the top “B” locations for future investment in office property in Germany: Leipzig (21 percent), Nuremberg (18 percent), Hanover (17 percent), Dresden (16 percent) and Wiesbaden (15 percent). At the same time, 49 percent indicated that they do not want to invest more strongly in “B” locations.
What types of property use will keep gaining in importance in Germany? Healthcare and care properties collected an especially large share of opinions (64 percent) followed by housing (56 percent), mixed-use property (55 percent), micro living (50 percent) and logistics property (45 percent).
German investors are investing more strongly abroad. The most popular target markets are Austria/Switzerland (30 percent), BeNeLux (14 percent), USA (14 percent), Northern Europe (12 percent) and France, which is on a par with Central & Eastern Europe (11 percent). At the same time, 49 percent indicated that they continue to invest only in Germany.
For the online survey, EXPO REAL commissioned the independent opinion research institute ‘IfaD’. Surveyed in July this year were 1,880 trade fair participants of EXPO REAL 2018 from Germany and abroad.