The industry is suffering from the turnaround in interest rates by the central banks. Building and buying houses are becoming more expensive, and demand is falling.
With real estate prices rising for years, the adjustment to the new reality of interest rates is still in full swing, wrote the economist at private bank Donner & Reuschel, Carsten Mumm. Mumm spoke of a standstill on the real estate market, which also suggests that this is a cyclical correction and not the bursting of a price bubble. So panic sales are not to be determined.
With a minus of 5.3 percent since the beginning of the year, the European real estate sector is currently the second weakest sector behind commodities. Since the beginning of 2022, there has even been a loss of more than 43 percent.
Vonovia SE shares have been the weakest in the DAX 40 since the beginning of 2023, at minus 15.5 percent. On Tuesday, however, they temporarily increased 5.88 percent to EUR 18.63 in XETRA trading, which brightened the short- and medium-term chart picture somewhat.
Apparently, many market participants see the chance of a bottoming out in the prices of real estate shares. In the MDAX, too, the shares of Aroundtown, LEG Immobilien at times increased by 4.81 percent to EUR 54.02 and TAG Immobilien by 6.19 percent to EUR 8.03, while in the SDAX Grand City Properties rose by 6.76 at times Percent to 7.66 euros significantly.
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Image sources: Vonovia SE