Slump in sentiment in real estate financing

The quarterly barometer of the real estate industry, an important index of sentiment in the sector, has fallen to a new low. Rising liquidity costs, volatile construction prices and increased refinancing costs are weighing on the market.

But how do these developments affect real estate financing and construction monitoring? What are the consequences of the crisis for the real economy?

Trade fairs such as the recently concluded MIPIM are necessary barometers of the industry's mood.

This year, the fair focused on the topics of financing, sustainability, technology and social responsibility. Numerous conferences and discussion panels highlighted the importance of these topics for the real estate industry and debated solutions on how to put them into practice.

But it's not all good news.

BF. direkt AG published its financing index for the first quarter of 2023 and the results are disturbing so far. The sentiment index has fallen by 19.44 points to a negative record and this for the sixth time in a row. A decline that makes the real estate industry sit up and take notice. The market is under strain, with low credit volumes and rising liquidity costs making it difficult for real estate companies to finance their projects. The impact on the real economy is considerable and reminiscent of the real estate crisis in the USA in 2008, which led to the financial crisis. But there is hope: More than 45 percent of experts see increased demand for alternative financing options such as mezzanine capital. But to successfully combat the current crisis, the industry needs professionalization, such as automation and standardization in the real estate industry.

Innovative approaches to solutions are needed now to get out of the crisis. But much can also be done in other areas such as construction management and monitoring, as well as project controlling. Fortunately, there are events like this that provide a platform for exchanging ideas and developing joint solutions.

In this way, the coming challenges and opportunities in the real estate industry can be successfully mastered.

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