German property vendors are wrong in thinking they will soon be able to demand the high prices that were prevalent in the 18 months prior to the onset of the credit crisis, says Andreas Krone, CEO of Apollo Real Estate.
German property vendors are wrong in thinking they will soon be able to demand the high prices that were prevalent in the 18 months prior to the onset of the credit crisis, says Andreas Krone, CEO of Apollo Real Estate.
'The effect of the credit crunch still hasn’t become very clear. We will know more when the banks clear up their balance sheets, probably by the middle of the year,' Krone told PropertyTV at the MIPIM real estate fair in Cannes.
Krone said that fears expressed in recent months about the health of the US economy can no longer be dismissed. 'I think the US will go into recession, probably by the third quarter of next year and this will have an impact on other economies, especially European ones,' he said.
Consequently, he expects real estate prices to fall not only in Germany but also in France, where vendors too have been clinging to the hope that the impact of the financial crisis would be short-lived.
In the UK, by contrast, vendors have already adjusted their price expectations. 'We see transactions are ongoing there and we hope this will also occur in Germany.'
The German market is still attracting keen interest. Almost 70% of all German and foreign investors who took part in a survey conducted by Estavis real estate group indicated they intent to step up their real estate invests in Germany this year.
