Improvement in Germany’s Property Sector

FRANKFURT (Reuters) – A key indicator of the health of Germany’s property sector improved last year and is expected to make modest gains in 2025, though the next twelve months will continue to be challenging, reports by two major real estate firms said on Wednesday.

Global real estate firm Jones Lang LaSalle (JLL) reported that property transactions in Germany rose to 35.3 billion euros ($36.42 billion) in 2024, a 14% increase from a slump in 2023.

Colliers, meanwhile, recorded transactions of 36.2 billion euros, up 12%.

Both firms forecast moderate growth in deals in 2025, but total transactions will remain well below long-term averages, underscoring the sector’s continued struggles.

Michael Baumann, Colliers’ head of capital markets in Germany, noted that geopolitical uncertainties, the outcome of federal elections next month, and the state of the economy “could dent the gradual recovery on the investment markets”.

For years, property in Europe, and particularly Germany, boomed as interest rates fell, spurring demand. However, starting in 2022, a sudden jump in interest rates and building costs pushed some developers into insolvency as bank financing dried up and deals froze.

Germany has been hardest hit in Europe’s real estate-related downturn, which has also affected China and the United States.

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