Poor mood in the real estate sector - Difi index falls drastically
Financial experts look back on an uncertain time, investors are likely to look with concern at the financial market of the future.
The German Real Estate Finance Index, also known as Index Difi, is compiled by JLL and ZEW. Every quarter, it records the assessment of real estate players and experts on the development of the German financial market. In May 2022, 25 experts assessed the credit market over the past six months as well as its development in the coming six months for the second quarter of this year, from the balance of which the Index Difi is calculated.
The survey thus reflects the mood on the commercial financing market. And it doesn't seem to be good at all right now.
The assessments yield a Difi that has plummeted by a full 51 points after appearing to have recovered from the effects of the Corona pandemic in the first quarter. The reason for the drastic drop seems to be the Ukraine crisis, which is accompanied by a negative economic outlook.
The impact affects all asset classes. High construction costs and financing interest rates are clouding the prospects for positive development, affecting risky ventures such as project developments in particular. However, the residential real estate sector has been hit hardest. Here, the indicator drops to a full 60 minus points, while the lowest margin can also be recorded in this sector.
Banks are currently adopting a cautious approach to lending and are taking a cautious approach to financing requests. Nevertheless, the experts assess the future development as better than the current situation.
The further development and upcoming analysis of the financial market for the new quarter remains interesting.