Germany is known as an export country. But surprisingly, its biggest industry isn’t the retail or automobile sector – it’s real estate.
With a gross value of more than €500 billion ($560 billion), the real estate industry is responsible for an impressive 18 percent of Germany’s economic output. Despite this it’s a small playing field, even with construction and mortgage banks factored in.
“We have three million people working in 817,000 companies. That’s evidence of a surprisingly small-scale structure,” said Michael Voigtländer, head of the real estate competence center at the Cologne Institute for Economic Research (IW).
According to a new study penned by Mr. Voigtländer and Tobias Just, a professor at the University of Regensburg, real estate assets in Germany are worth a total of €11.2 trillion ($12.5 trillion), including the value of developed land. This total is larger than anywhere else in Europe, but diminished by the fact that property ownership numbers are actually relatively low.
That makes Germany’s real estate market a well-hidden economic anchor for all of Europe. The multifaceted ownership structure in the housing market and high financial security requirements for mortgages make the industry quite stable. Germany has also has several strong cities with attractive commercial real estate markets right now.