Financing Pressure Alters Real Estate Market Sentiment

The latest Kirchhoff Sentiment Indicator reveals a significant dip in market sentiment for real estate stocks, with a decline to 24.6 points, compared to 53.3 points in H1 2025. High financing pressures and subdued transaction activity are contributing to this downturn. Despite these challenges, the residential real estate sector retains the most favorable risk/reward profile, maintaining optimism for medium-term growth.

Real estate stocks have underperformed relative to the DAX, displaying an average six-month loss of nearly 8%. High financing costs are a persistent issue, affecting both residential and commercial properties. There is, however, potential for recovery, as shares are trading about 46.8% below their net asset value, suggesting room for gains once conditions stabilize.

Analysts note that high financing costs and regulatory pressures are the most significant hurdles in the industry. In the long term, sustainability considerations and ESG requirements are expected to grow in importance. Despite these issues, the outlook hints at opportunities once the market conditions normalize.