German Real Estate: Without a Future or Prosperity and Growth?

Robert Janke

ERES from European Real Estate Society (ERES)

Abstract: Germany is the biggest real estate market in Europe. Germany's great turn into the 21st century appears to be a challenge. Measured in terms of growth rates, its economic strength has slipped from first to last place among all neighbouring European countries. Even when it comes to economic performance per capita of the population, countries like England, France and Italy have surpassed the Germans. Some four million people are officially unemployed and another two million are being re-educated and retained at the government's expense. Government budgets are heavily indebted, and the debt limits in accordance with the Maastricht criteria that Germany forced through have been exceeded this year the third time. The social system is fragile. Some cities have been forced to take out short-term loans to pay their employees' salaries. While opinion leaders in the German real estate industry are complaining about the bleak investment climate and an oversupply of office space of unimaginable proportions, foreign funds are preparing to buy in Germany. Internationally operating opportunity funds have progressively discovered Germany. The economic trend in Germany needs visions for prosperity and growth. Domestic creativity and international capital are required. The acquisition of Gagfah, the Essen based housing association and its 80,000 apartments for 2.1 billion euros and the assumption of 1.4 billion euros in liabilities by the American investment group Fortress is viewed internationally as a signal that the time is right to invest in the German real estate and investment market.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2005-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2005_213

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