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Germany property trough worsens as foreign investors scale back
(www.reuters.com)
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this post was submitted on 24 May 2024
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Property prices are used here as a proxy for the health of the economy.
The author may or may not be concerned about the affordability of homes. But that's a different issue. This is just about absolute prices. And low prices mean low interest in Germany. As the article says, people are interested more in London or Paris.
This leads to fewer investments in the economy and Germany is at risk of falling behind.
Sorry, I still don’t get it. What does property prices have to do with the health of the economy?
Especially in times where work from home is going strong and massive office buildings are not needed?
It's one indicator of economic health out of many. Unlike many other assets, real estate is immovable. So it has a strong association with the location.
Yes, work from home is a good argument, why falling office prices might not be a big deal. The question then becomes, is this trend more pronounced in Germany than in other countries? Maybe, but probably not.
Also unfortunately the article mentions Signa (commercial) and vonovia (residential) real estate. So there's no clear separation. But overall the trend is true for both.
If office buildings are in demand in one place but not the other, what could that say about their respective economies (i.e. the companies that would use those office spaces)?
It could mean many things, for example: you could argue that companies at the low demand place are more favorable of home office.