German real estate deals seen edging up, but close to decade lows By Reuters

By Tom Sims

FRANKFURT (Reuters) – A key indicator of the health of the German real estate sector is likely to improve in 2024 and make further gains next year, but will remain at its weakest level in nearly a decade, highlighting the sector’s struggles, forecasts showed on Tuesday.

Global real estate firm Jones Lang LaSalle (JLL) has predicted that property transactions in Germany will reach 35 billion euros ($37 billion) in 2024 and 40-42 billion euros in 2025.

The forecasts, if borne out, would mark 2023 as a low point in Europe’s biggest economy’s deep industrial crisis, but they also reveal that any recovery will be slow.

“Despite the growth, the picture remains sobering,” JLL said.

Economic weakness has led to companies abandoning or delaying relocation and expansion plans, it said.

For years, property in Europe, and particularly in Germany, had been booming as interest rates fell, fueling demand.

Germany has been hit hardest by the real estate crisis in Europe, which has also hit China and the United States.

Interest rate cuts have since provided some support to the market.

Separate data on Tuesday pointed to continued weakness in the German economy as business sentiment worsened more than expected in December, weighed down by companies’ pessimistic outlook for the coming months amid geopolitical uncertainty and an industrial slowdown.

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