Financing Pressures Weigh on Property Stocks as Investor Sentiment Sinks to Lowest Level on Record

Financing Pressure Weighs on Property Stocks as Investor Sentiment Sinks to Lowest Level on Record

• The sentiment index fell to -20.5 points, reaching its lowest level since the survey began in 2017 (2025: 24.6 points).
• Real estate stocks continue to significantly underperform the DAX 40, which has clearly performed better over the medium and long term.
• Residential real estate stocks are viewed more negatively, at -28.7 points, than commercial real estate stocks, at -16.4 points.
• The valuation discount remains high: shares are trading at an average discount of 62.8% to their net asset value (NAV).
• The financing environment and regulatory requirements are regarded as the greatest short- and long-term challenges.

Hamburg, 13 November 2026 - Hamburg-based communications and strategy consultancy Kirchhoff Consult, which specialises in financial communications and ESG, has published the fourteenth edition of its “Kirchhoff Sentiment Indicator for Real Estate Stocks”. Overall sentiment has deteriorated significantly compared with the previous year: the sentiment index fell to -20.5 points, compared with 24.6 points in 2025, reflecting the challenging market environment. This marks the lowest level recorded since the survey began in 2017.

Jens Hecht, Managing Partner at Kirchhoff Consult, comments: “Sentiment has shifted significantly, and this applies to both segments. Analysts see the financing environment and regulatory requirements as the main challenges and believe that both issues will continue to have a long-term impact. At the same time, real estate stocks are trading significantly below their intrinsic value on average. This Gap shows that the market has already priced in many of the risks. Once financing conditions and regulation stabilise, this valuation discount could increasingly translate into opportunities.”

Muted market sentiment: real estate stocks under pressure in the short and medium term
Over the past six months, the shares of the ten largest German-listed real estate companies have lost an average of approximately 23%; over a twelve-month period, the decline was approximately 29%. They have therefore clearly underperformed the DAX 40, which gained significantly over the same periods. In recent months, commercial and residential real estate stocks have shown similarly negative performance.

Over a longer period, the picture is somewhat more stable: over three years, real estate stocks have recorded an average decline of 13.9% but nevertheless remain well behind the performance of the overall market. High financing costs, despite strong demand for housing and rising rents, are weighing on both asset classes. In addition, the shares are trading at an average of 62.8% of their net asset value (NAV). While this makes capital increases more difficult, it also indicates significant potential for share price appreciation.

Residential real estate remains the most promising segment despite headwinds
Analyst sentiment towards residential real estate is more negative, at -28.7 points, than sentiment towards commercial real estate, at -16.4 points. Nevertheless, residential real estate was most frequently identified by analysts as the most attractive asset class, receiving six mentions. In the short term, approximately 56% of the analysts surveyed expect residential real estate stocks to decline. Only around 11% expect prices to rise. The long-term outlook is considerably more positive: only around 33% of the analysts surveyed expect residential real estate stocks to decline. The clear majority does not anticipate any significant changes in share prices.

Commercial real estate under pressure, with significant areas of risk
Sentiment towards commercial real estate is negative at -16.4 points, compared with 36.9 points in 2025. The uncertainty continues to stem primarily from profound changes in the working environment, persistent oversupply of space in B and C locations, and challenging leasing prospects. In the short term, approximately 56% of analysts expect commercial real estate stocks to decline. Over a twelve-month horizon, expectations of falling, stable and rising prices are evenly balanced.

Financing environment remains the greatest challenge
The analysts surveyed identify the financing environment and regulatory requirements as the greatest challenges, with each issue cited by approximately 67% of respondents. High financing costs and more difficult access to equity capital are placing significant pressure on both residential and commercial real estate. Around 33% of respondents identify inflation as another current factor holding back the market.

Looking ahead to the coming years, the financing environment is expected to become even more important, with approximately 78% of respondents citing it as a key factor. Analysts also expect ESG requirements to become significantly more critical over a period of more than three years. By contrast, most analysts no longer consider the demand environment to be a major concern, either currently or over the long term.

Key findings from the survey
The surveyed analysts’ expectations for real estate stocks in the second half of 2026 were significantly more negative than in the previous year. The sentiment index stands at -20.5 points, and expectations for share price performance over the Next three and twelve months are predominantly negative.

Jens Hecht sees the Gap between current share prices and intrinsic value as a potential opportunity once financing conditions and regulation stabilise. The survey reflects the views of nine real estate analysts. It represents a snapshot of market sentiment and is not a share price forecast.

FUTHER INFORMATION
The study is available at the following link: Kirchhoff Sentiment Indicator for Real Estate Stocks H2 2026.

Survey methodology
The “Kirchhoff Sentiment Indicator for Real Estate Stocks” published by Kirchhoff Consult is a sentiment indicator for the German real estate equity market. Kirchhoff Consult regularly surveys leading analysts covering German real estate stocks on their expectations for market developments over the Next three and twelve months. Analysts are also asked separately about their expectations for the performance of commercial and residential real estate stocks.

Respondents use a scale ranging from +2, representing a strong increase of more than 15%, to -2, representing a strong decline of more than 15%. A score of 0 indicates that no change or only very minor changes of plus or minus 5% are expected. The results represent the average of all responses submitted.

For the analysis underlying the “Kirchhoff Sentiment Indicator for Real Estate Stocks” for the second half of 2026, nine real estate analysts provided their assessments.