More investors are buying again

• The recovery in the German property investment market which has been emerging for several months is increasingly reflected in the market figures. The number of buyers registered by us in October was a good third higher than this year's low in April. In the past three months in particular, the number of buyers has been trending upwards. This shows that not only has the willingness to sell increased, but also that more investors are once again willing and able to make purchases. The number of transactions and the transaction volume have also risen in the past two months. In October, the transaction volume for commercial and residential property totalled €2.9bn. This means that the average transaction volume of the last twelve months was significantly exceeded for the second month in a row. The rolling transaction volume of the last twelve months rose by 2.6% compared to the previous month and totalled €31.0bn at the end of October. If these trends continue in the remaining two months of the year, 2024 will be the first upswing year in the new cycle.
  
  
• The fact that more buyers are active on the market again is also reflected in some more intensive bidding processes. This could soon lead to a slight compression of yields in certain sectors. However, we believe that the potential for yield compression is limited, as inflation—and therefore interest rates—are likely to remain higher in the long term. The recent surprising rise in inflation alone could prompt the ECB to take slower interest rate steps. It is also likely that the outcome of the US elections and their anticipated political and economic consequences for Europe will have an inflationary effect, further limiting the room for rate cuts. At least this is the assessment of Prof Dr Tobias Just from the IREBS Real Estate Academy. Overall, we believe that the uncertain real and financial economic environment means that the current upturn in the German property investment market remains fragile

You can download all figures and the corresponding data here.