The mood on the German real estate markets has continued its descent though August. In the August issue of its monthly survey among 1,000 relevant market players, King Sturge clearly diagnosed a pessimistic note. For one thing, the survey-based Real Estate Climate dropped down to 77.5 index points, reflecting the macro-economic downturn. This means that last month's figure of 90.8 was undercut by 14.6%. The Real Estate Economy index, which is based on hard macro-economic data, plunged to 158.8 points (down from 169.2 points last month).
"The mood in the real estate economy has cooled off further in August, and noticeably so. This comes as no surprise, as the macro-economic decline has become all too obvious," commented Sascha Hettrich, Managing Partner of King Sturge Deutschland. "There is the very real danger that Germany's economy, following a negative growth phase in Q2, may continue to shrink in Q3. If so, you could say that Germany might slide into a recession, as the term is commonly understood."
The negative mood on the real estate market manifests itself most patently in the Investment Climate, which captures the willingness to invest. This index dropped from 69.2 down to 57.9 points, whereas the Rental Climate