Price expectations have continued to level out, a trend which initially began in 2016. The economy is expected to perform well over the next 12 months, although not quite as well as in the previous year.
Respondents’ forecast that price curves will flatten out is good news. Prices for certain property and location qualities have reached levels that can only be explained by the low-interest rate environment and investment pressure.
The aggregated indices’ positioning along the stability threshold conceals the fact that not everything that glitters is concrete gold.
The Price Expectation Index for the residential segment remains positive at 18.7 pts. and is at its lowest level since 2012. Respondents are increasingly indicating that they consider even slightly negative price trends likely, probably due to vacancy trends at locations outside the city centers.
The Price Expectation Index for retail space is at the lower end of the scale. Price expectations for this space profile have been negative since we first started compiling the sresi and currently stand at -115.5 pts. (with the scale extending to -200 pts.). Looking back, we can see that respondents’ forecasts were in line with actual market developments. This is partially attributable to the shift of retail sales to platforms. Accordingly, 70% of those surveyed anticipate that demand for logistics space in urban centers will be on the rise and that prices for special-purpose properties will remain stable over the next 12 months.
Estimates regarding demand for office space reflect positive economic development. While price expectations for these spaces have been on the rise over the past few years, at -51.2 pts., they are still in negative territory due to the large amount of space still available plus ongoing consolidation by large tenants. At the same time, respondents expect demand for office space to decline in the future. Well over 70% of the survey’s participants consider a 10% drop in demand for office space over the next ten years realistic.