Falling wages could push down German residential rents
The coronavirus crisis could potentially be the end of the decade-long property boom in Germany, writes the Suddeutsche Zeitung. With no apparent irony, the paper quotes economists who believe it's "conceivable" that the rise in rents and property prices could be dampened by the pandemic. If anything, this demonstrates just how deeply engrained property has become in the minds of Germans as a safe harbor. Michael Voigtländer of the Institute for German Business says the housing market in Germany will come to a standstill over the next two months. He said that few visits are taking place as buyers are too worried about their jobs and the prospect of wage cuts. Google searches for property are down while the home financing broker Hüttig & Rompf also reports that inquires are down. Voigtländer predicts that the ambitious pricing on new buildings would be difficult to achieve. Moreover, with a general expectation that Germans are likely to take a hit on their earnings this year, there appears little reason to hope for an increase in rental prices.