Germany: Further Improvement in the Ifo Business Climate

Results of the January 2011 Ifo Business Survey

The Ifo Business Climate Index for German industry and trade rose further in January. The business climate has thus continued the positive development of the past year. The firms are just as satisfied with their current business as they were in December, and they have given more favourable assessments of their business prospects for the coming half year. The German economy has started the year with great vigour.
In manufacturing the business climate has clearly improved, having clouded over somewhat in the previous month. The manufacturing firms report an improved business situation and once again have given more favourable appraisals of their business outlook. Especially in exports, the survey participants see much greater opportunities. The firms have further increased the utilisation of their machines and equipment, and now capacity utilisation in manufacturing is above average. They also plan to increase the number of their staff.

The business climate in retailing and wholesaling has cooled off somewhat, following a significant improvement in both distributive sectors in December. Both retailers and wholesalers no longer assess their current business situation quite as favourably as in the past month. With regard to the six-month business outlook, their optimism has also weakened somewhat.

In construction the business climate index has risen once again. The surveyed contractors are more satisfied with their present business situation and also anticipate a clear improvement in business in the coming months.


Hans-Werner Sinn
President of the Ifo Institute for Economic Research at the University of Munich

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Further Improvement in the Ifo Business Climate 

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Germany: Further Improvement in the Ifo Business Climate

Prices for residential properties climbed significantly

In 2010 average rents and prices on the German residential property market climbed by 2.0% compared to 2009, while commercial properties went up by only 0.9%. Rents in new buildings also showed an above-average increase (+2.5%); prices for subsequent lettings climbed by 2.3%. The effects of the crisis, BulwienGesa says, were most clearly evident for office rent, which went up by only 0.7%.

For local support and research for property investments please refer to www.berlin-portfolio.com
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Prices for residential properties climbed significantly

German Real Estate in High Demand

Germany has overcome the financial crisis like no other European country. This reflects in the property market. 86% of the more than 100 firms and institutional investors polled by Ernst & Young Real Estate (E&Y) for its trend barometer German Property Investment Market 2011 are of this opinion. Even though investors still often have to “struggle” with banks for financing, "equity is king". Nevertheless: the German market, which is held to be particularly stable, became considerably more attractive for investors last year. In the current poll, it was classified by 33% of the participants as “very attractive,” whereas only 8% were able to take this view last year. Compared to other European countries, the majority (54%) even gives Germany the best mark, after only 25% last year. The focal point in this regard is on residential properties again (44%, after 40% last year), followed by retail (again at 36%). On the other hand, only 20% want to invest primarily in offices, after 27% last year.

For local support and research for property investments please refer to www.berlin-portfolio.com

German Real Estate in High Demand