Brexit Favours Constructors in Germany

While uncertainty reigns in regards to the island state’s destiny, German contractors benefit.

Brexit is moving closer – but not everyone is pessimistic. (Image:

It’s closing date on the 29th of March: Then, the United Kingdom is threatened by a “hard Brexit”, should there be no mutual agreement on the withdrawal between both parliament and prime minister Theresa May. But already now, first consequences loom due to prevalent uncertainties.

For instance, prices for both condominiums and homesteads decrease constantly on the island, which curbs investments all over the country. According to the daily paper “The Guardian”, the owner-occupied housing market is said to have reached the “weakest level since six years”. Uncertainties in regards to the imminent withdrawal strengthen this development additionally.

But there are winners as well. Because the situation in the United Kingdom, paired with weaker, global economic data, increases the count of investments in government bonds and covered bonds. According to Interhyp, this oppresses interest rates of German mortgage credits. These dropped between October and January from 1.55 percent to 1.38 percent, which inhibited growth potential of mortgage interest rates – and thereby benefits German home ownership buyers and building contractors.

Already in the year 2016, investments abroad reduced in regards to the impending referendum. But real estate prices could still record an almost two-digit value increase. Since then, growth between September and November reached a new low with 0.3 percent. Now, a continuous decrease of potential buyers and thereby transactions is expected until the withdrawal at the end of March.

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