COVID-19 impact on the German real estate market

With this blog post we would like to emphasise and explain the recent developments with regards to the COVID-19 pandemic in Germany and how it relates to the German real estate market.

First and foremost, we think that the German government took immediate action with a full lock down modus in all 16 federal states and came up with a stimulus package that far exceeded expectations of many well known Economists such as Paul Krugman.

To add up direct transfers to companies and employees starting during the lockdown, Germany’s fiscal response to the pandemic amounts to 13.3 percent of GDP.

Bloomberg, one of the best financial data company in the world, described Angela Merkel’s government stimulus package as the German Bazooka as you can see below.

With the numbers of new cases, hospitalisations and deaths declined, certain federal states in Germany started to reopen to allow economic activities to resume with a strict set of rules such as masking and social distancing in public.  

Although some cities in Germany are still experiencing new infections and fearing a spreading of the COVID-19 virus, we think that Germany has the situation under control and reported evidently much lower numbers than their Western peers.

The path forward for the German economy is still extraordinarily uncertain, but with the current data available we are still able to draw some conclusions for the German real estate market.

The big property listed companies in Germany such as LEG, Vonovia and Deutsche Wohnen all reported that only a few tenants took advantage of rent deferrals. To put this more into perspective, only 1% of their residential property portfolio is affected by rent deferrals. We think that number is pretty robust and validates the overall market sentiment as in the German residential real estate market is seen as a safe haven.

People also asked us to share some colour on the latest transactions in the German real estate market. Talking to other investors and brokers we got a sense that residential real estate is still in demand and flat in terms of transaction volumes to the previous year. New build activity is slightly down year over year. Food retail stores and logistic properties have seen an increase in activity in comparison to last year.

Again it is impossible to predict the future but it is fair to say the German real estate market is in a healthy and much better shape than other countries. This is widely perceived among overseas buyers, otherwise we wouldn't experience a significant increase in enquiries by overseas buyers.

Sources: Bloomberg Opinion,,, Savills Consult GmbH

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