The sentiment within Germany’s real estate sector has deteriorated significantly during the second quarter of 2026, according to a survey on the Real Estate Mood Index conducted by the Institute of the German Economy (IW) and the industry association ZIA. The assessment of the current business situation has dropped by 6.7 points to 7.9, while expectations have plummeted a dramatic 27.8 points to minus 11.4. Overall, the real estate climate fell by 17.5 points to minus 2.0, pushing it back into negative territory. This data, reported by the “Handelsblatt” (Friday edition), is based on responses from CEOs and senior managers of approximately 1,200 companies in the industry.
This negative trend is evident across nearly all segments. While the current assessment of the office market remains relatively stable, expectations for the sector are turning sharply negative. In the residential segment, the downward trend is accelerating, driven by factors including regulatory uncertainty and increasing costs. Project development, in particular, remains under severe pressure, with the current business situation holding at a very low level.
Iris Schöberl, President of ZIA, stated to the “Handelsblatt” that this decline in mood is not simply a malfunction of the market, but rather a loud alarm signal directed at policymakers. She stressed that constant debates surrounding rent caps, regulation, and government interventions are creating anxiety. Schöberl emphasized that entrepreneurial activity and investment require trust, and confidence can only grow on reliable foundations.
