The inflation rate is now stable within the target corridor, the yield curve has normalised – after a total of eight key interest rate cuts since mid-2024, a level has been reached that is currently in the range of the interest rate considered neutral by the European Central Bank (ECB). Accordingly, there is no pressure for the ECB to act in the short term.
Today's decision to maintain the key interest rate level in the euro area thus meets the expectations of market participants and was anticipated by the real estate and capital markets. Macroeconomically and on the markets, there are also a large number of uncertainties with the negotiations in the customs dispute, the discussions in the environment of the US Federal Reserve and the development of exchange rates.
Against this background, the ECB is likely to use the coming months with a view to its meetings in the autumn to continue monitoring and analysing the data situation – also taking into account the key interest rate decisions of the US Federal Reserve.
For the real estate markets, the sideways trend in short-term and, above all, long-term interest rates has a stabilising effect and increases the resilience of calculations in new construction, investment decisions and real estate management.
In the future, the positive impetus for the German real estate markets is likely to result primarily from the improving macroeconomic sentiment as well as from the European and German investment packages in infrastructure and defence.
