The real estate market in Germany

Germany is the world’s third-largest exporter, the Eurozone’s largest economy and currently has one of the lowest unemployment rates in the world. Unfortunately, due to tensions in international trade and structural changes in the economy, the growth pace of the economy is below 1% and this is not expected to change in the coming years. Unemployment has remained at low levels throughout the last years (3,4% in 2019). In light of the shortage of skills in the labour force and programmes to support flexible working hours, worsening conditions in the labour market are not expected. 

Even though weak world trade growth has contributed to further reduction of industrial production and a slowdown in the German economy, the expansionary monetary and fiscal policy will continue to support the growth. At the same time, the weaker external demands are supported by domestic forces. Private consumption is supported by the growth of household disposable income due to fiscal policy measures and growth in wages. Therefore, despite the slowdown in the economy, German Consumer confidence remained high throughout 2019. The construction sector has remained robust and business confidence in the sector is strong. The slowing housing investment in the second quarter of 2019 was largely temporary and mild weather conditions enabled more construction during the winter months and real estate development companies are well stocked with upcoming projects. 

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