The mood in Germany’s real‑estate sector has deteriorated again at the start of the year. According to a report in the Handelsblatt Friday edition, the latest real‑estate sentiment index from the German Institute for Economic Research (IW), commissioned by the industry group ZIA, shows the climate fell by one point in the first quarter.
ZIA president Iris Schöberl told the Handelsblatt that the fragile footing of the sector’s recovery is being hit again by geopolitical crises and rising energy costs. She warned that without decisive structural reforms, the housing market could become dramatically worse-particularly in metropolitan areas that are already under extreme pressure.
Since the summer of 2025, the indicator has lost almost ten points. While the assessment of the current business conditions improved slightly to 14.5 points in Q1 2026, expectations fell sharply to 16.4 points.
Project developers are feeling the sharpest pressure. The housing market’s current situation has edged up a touch, but company expectations have worsened noticeably. The office market remains the sole bright spot, with both the current situation and expectations improving.
