According to Vonovia CEO Rolf Buch, the wave of bankruptcies among real estate developers on the German market has not yet abated.
“We will see an extremely high number of bankruptcies in the next few months, and perhaps even in the next few years,” Buch told the International Club of Frankfurt Business Journalists this week. He added: “We are already seeing this today.”
The development is not good for the ailing real estate market, not much new construction is being done. Ultimately, there will be a concentration of developers who initiate new construction projects. But Buch painted an optimistic picture for the industry leader Vonovia itself: “We’re actually through.” There will be no more massive devaluations – “not on that scale.” “The time for price corrections is over,” he concluded.
6.8 billion euros loss
High interest rates, increased construction costs and a lack of large transactions plunged the German real estate market into crisis. Many real estate developers got into trouble. Last year, Vonovia had to write down the value of its real estate portfolio by almost eleven billion euros, and the group posted a loss of around 6.8 billion euros.
Other real estate companies also posted losses. The question now remains whether the high write-downs will continue in 2024. In the first quarter, Vonovia posted a profit – a revaluation of the housing stock was not necessary, the Bochum-based company said at the time. Vonovia will present its half-year figures on August 1.
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