INVESTMENT MARKET RESIDENTIAL PROPERTY

On the investment market for residential properties, the pandemic resulted in another upswing and a higher transaction volume than the previous year. Homes and investment residential properties became a synonym for certainty during these uncertain times. In addition, residential properties have become a replacement for the current negative yield bonds for both institutional and private investors. Investment properties in major centres with a secure cash flow were particularly sought after. Because of lower availability, net initial yield in this segment saw another sharp decline.

Due to high demand, yields fell again on other asset classes as well, with the exception of investment properties in rural areas – despite the sharp increase in market risks. With the exception of major centres, owners of residential properties are faced with rising vacancies and falling rents in many places. As with the rental apartment market, the gap between high-quality and high-risk residential properties is widening. However, since interest rates remain low, yields are not expected to climb in 2021. Purchase prices for sought-after investment properties are likely to rise again, although there will be little for investors in terms of gross yield.