The current business report reveals a marked deterioration in market sentiment within the German real estate sector. According to the President of the ZIA, Iris Schöberl, this slump does not represent an isolated market disturbance but rather a clear alarm signal to the political leadership. She highlights that the downward trend is accelerating, particularly in the residential market. The ZIA, together with other associations, has repeatedly formulated specific demands, which include accelerating approval processes, stabilising financing conditions, simplifying construction, and reducing regulatory hurdles. It is now demanded that these points be put into practice in construction.
Uncertainty is affecting almost all segments of the real estate market. The negative development, especially concerning business expectations, extends across most property types. Persistent geopolitical and economic risks, as well as ongoing uncertainty regarding interest rate developments, are identified as primary causes. The survey, conducted from 7 May 2026 to 1 June 2026, provides a current snapshot of these developments.
In the office segment, the current business situation remains stable at 15.5 points due to existing rental agreements. However, expectations have fallen significantly (-6.9 points). A concentration of demand on high-quality spaces is evident, while uncertainties about future space requirements cloud the outlook. Retail shows an ambivalent picture: although the current business situation is still above average compared to other property types, expectations have dropped to -17.2 points. Concepts such as local supply centres and specialist retail parks remain successful, while traditional shopping centres and mixed-use approaches are under pressure.
The residential market is experiencing an acceleration of the downward trend, with falling expectations at -22.9 points. In addition to rising costs, discussions about a possible tightening of rent regulation are negatively affecting sentiment. In contrast, existing property refurbishments, senior living, and repurposing projects are gaining attractiveness compared to new build projects. Ms Schöberl notes that constant debates about rent caps and further regulations exacerbate market uncertainty. Entrepreneurial action and investments therefore require trust and reliable framework conditions.
Project development is in an extremely strained situation, characterised by an alarming -25.0 points for the business situation and a persistently negative real estate climate. High construction and financing costs, as well as weak demand, are hindering development. Almost 60 percent of the surveyed companies expect a less favourable financing environment in the next twelve months. Slightly positive expectation values of 7.5 points are mainly attributable to the remaining hope for improved political framework conditions.
- —Residential properties, particularly with a focus on existing property refurbishment
- —Data centres
- —Logistics properties
Office and retail properties continue to face major changes. Here, investments increasingly depend on the property's quality, location, and adaptability to new user needs.
