News/Real Estate Finance

REECOX – German real estate economy back to level at the beginning of the year

German Hypo REECOX exceeds the 300-point mark again

Germany is the first of the countries monitored by REECOX to return to pre-crisis levels. The rapid recovery in the second quarter therefore continued in the third quarter. The months of July (+4.3 %) and August (+6.1 %) in particular contributed to this, while September (-0.7 %) saw slightly muted development. In all, the REECOX Germany rose by 9.8 % and now stands at a strong 304.9 points.


Andreas Rehfus, Member of the Board of Managing Directors at Deutsche Hypo: “In the middle of the year, an initial recovery was seen in all countries monitored. This trend is also reflected in the business indicators. The rising number of infections could quickly offset the positive development of the summer months. The challenge now is to contain the spread of infection as quickly as possible, as the long-term impact on the economy also depends on this.”


Once every quarter, the REECOX provides an overview of real estate market activity in Germany, France, the UK, Poland, Spain and the Netherlands. The index for each of the six countries is calculated using five input variables. In Germany, those variables are the DAX, the DIMAX, the European Commission’s Economic Sentiment Indicator for Germany, the basic rate of interest pursuant to Section 247 of the German Civil Code (BGB) and the interest rate for ten-year German government bonds. The leading German index, the DAX, was flat in July and rose in August by around +5.1 %, before falling slightly by 1.4 % in September. Yet overall, the development of +3.7 % was still positive. Germany’s DIMAX real estate share index also achieved another positive quarterly result with +4.2 %. While business sentiment, as measured by the European Sentiment Indicator (ESI), was not yet able to fully compensate for the decline caused by the coronavirus crisis in the second quarter in Germany, a clear recovery trend was evident in the third quarter:: the business climate is back at 95.5 points, thus seamlessly continuing the values at the end of 2019.


Peter Kleinhütten, Acquisition North Rhine-Westphalia, says: “In the third quarter, it became further apparent that quality and above-average locations are able to hold out against the coronavirus crisis. Well-let core properties in A cities remain relatively unaffected. Once again, they are proving to be stable investments with unchanged or even slightly declining returns.”