Real Estate Stocks Show Signs of Stabilization Amid Challenges

The "Kirchhoff Sentiment Indicator for Real Estate Stocks" report reveals a cautious optimism about the future of real estate stock prices. The sentiment index for H1 2025 rose to 53.3 points, indicating a moderate market sentiment improvement since H2 2024.

Residential real estate, with a sentiment score of 69.7 points, clearly outpaces commercial real estate, which sits at 41.0 points. Despite the sector lagging behind the DAX's performance, a high valuation delta suggests significant catch-up potential.

Key challenges identified include a difficult financing environment and stringent ESG requirements, which impact business models and investment decisions. Analysts emphasize that residential real estate remains attractive due to stable demand and a favorable risk/reward profile.

While the sentiment for commercial real estate remains stable, office real estate continues to be seen as the most uncertain asset class, given structural work environment changes and surplus space issues.