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PRESS RELEASE: Accentro Real Estate AG: ACCENTRO -2-

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PRESS RELEASE: Accentro Real Estate AG: ACCENTRO Housing Cost Report 2020



DGAP-News: Accentro Real Estate AG / Key word(s): Real Estate
Accentro Real Estate AG: ACCENTRO Housing Cost Report 2020

2020-05-26 / 11:59
The issuer is solely responsible for the content of this announcement.

*PRESS RELEASE*

*ACCENTRO Housing Cost Report 2020*

*- Across Germany, homeownership has an average economic benefit of 48.5
percent over renting*

*- Limited potential for COVID-19-related setbacks in residential segment*

*- Landlords and buy-to-let investors come from every population cohort*

*Berlin, 26 May 2020* - Buying residential property in Germany remains much
more affordable than renting, and this is true nationwide. The cost
advantage of inhabiting a condominium rather than a comparable rental flat
equalled 48.5 percent in 2019 - this is the upshot of this year's ACCENTRO
Housing Cost Report. According to the survey, owner-occupiers pay less for
housing in virtually every district in Germany, including in the
metropolises. The gap between the costs of owner-occupiers and the costs of
tenants actually widened further since the previous year.
For the purpose of the Housing Cost Report, now already published in its
fifth edition, the IW Economic Institute compares the housing costs paid by
owner-occupiers with those paid by tenants; rents and owner-occupiers'
housing costs were analysed for all 401 of Germany's districts and
independent cities. The calculation is based on the net rent versus the
owner-occupancy costs which break down into the purchase price, the
incidental acquisition costs, the mortgage interest and the loss of interest
on equity capital along with reinstatement costs and depreciation.
"Considering the persistently high property prices and the permanently low
level of interest rates, it is still safe to say that homeownership
represents the best form of private retirement planning. As in previous
years, this year's ACCENTRO Housing Cost Report demonstrates also that it is
more affordable to buy than to rent almost anywhere in Germany. At the same
time, the survey highlights the fact that private landlords are found in all
population cohorts," elaborated Lars Schriewer, CEO of ACCENTRO Real Estate
AG.

*No Overvaluations in Evidence on Real Estate Market*
Due to the great housing cost advantage of homeowners over tenants, the IW
research institute concluded that Germany's residential real estate market
is not overvalued. "Even the coronavirus crisis implies only a limited
potential for setbacks. I consider a drastic price drop by 20 percent or
more, as predicted by some, to be rather unlikely. Instead, I assume that
condominium prices will more or less flatline this year, generally
speaking," elaborate Prof. Dr. Michael Voigtländer, Head of the Financial
Markets and Real Estate Markets Competence Unit at the IW Institute.
"However, the economic implications of the coronavirus crisis and the
associated threats to the housing market are unevenly distributed among the
regions. Especially in southern Germany, the threat of looming price
adjustments for residential real estate seems to have increased, unlike in
eastern Germany, where rent growth and corresponding price hikes remain a
possibility," added Voigtländer.

One of the reasons for the stable housing market, according to the ACCENTRO
Housing Cost Report, is the interest rate development, because interest
rates are more likely to fall than to rise.
This assessment is backed by the measures the ECB has taken, among others,
which are causing interest rates both for short and long fixed-interest
periods to soften, as the experiences with the financial crisis and the
sovereign debt crisis have shown. Another argument supporting the assessment
is the growing imbalance between savings and investments, which also has a
softening effect on the level of interest rates. On top of that, previous
surveys already revealed that real interest rates tend to decline in the
wake of pandemics.

*Owner-Occupiers Better off even in Metropolises *
As in previous years, the cost advantages of owner-occupiers are limited not
just to rural areas or regions with low purchase prices, but are in evidence
even in cities across Germany that are characterised by elevated price
levels. In the "Big Seven" cities, the cost advantages break down into 35.1
percent in Berlin, 43.1 percent in Hamburg, 45.9 percent in Munich, 51.0
percent in Stuttgart, 55.6 percent in Frankfurt am Main, 58.7 percent in
Düsseldorf and 59.5 percent in in Cologne.

*Support for Homeownership Investments Advised*
In its latest survey, the IW institute identified several reasons explaining
why homeowners pay less for housing than tenants. As a result of the drop in
mortgage interest, the anyway very low costs for homeownership have
decreased even further. Although selling prices have continued to go up, the
price growth is more than offset by the savings implied by the interest rate
cuts. Tenants simply lose out on this interest advantage.
"Once again, we therefore conclude that the government should continue to
support people's bid for homeownership. Since the required equity capital
represents the main hurdle for most of those who seek homeownership, we
propose government-guaranteed subordinated loans and a reform of the real
estate transfer tax, for instance. This would lower the threshold
specifically for households with low- and middle-income," said Voigtländer.
"Definitely a hurdle when seen in combination with the rising real estate
prices are the tightening equity requirements. This is where government
action is urgently required, both by helping with the capital charge and by
reducing the incidental acquisition costs. Sensible options would include an
allowance or waiver of the real estate transfer tax," Schriewer added.

*Landlords and Buy-to-Let Investors Come from Every Population Cohort*
According to IW, 93 percent of Germany's private landlords derived a
positive income from letting and leasing in 2017, meaning that the gross
rental income exceeded the costs of maintenance and capital improvements.
For nearly 20 percent of the households letting residential property, the
income from letting and leasing was an amount between zero and 2,500 euros,
between 2,500 and 5,000 euros for another 20 percent, and between 5,000 and
7,500 euros for around 17 percent. One in ten landlord households actually
collected more than 20,000 euros.
44 percent of the private landlords were in the top 20 percent income
bracket among German households. 25 percent were among the fourth quintile
of Germany's highest-earning households. But a sizeable share of private
landlords are actually not among the high-earning households: 15 percent
belong in the third income quintile, ten percent belong in the second one,
and six percent count among the lowest-earning 20 percent of German
households.

*Buy-to-Let Investments in Residential Property Pay off*
The number of private landlords increased by around 750,000 households
between 2010 and 2018, which IW interprets as a sign that many private
households took advantage of the attractive conditions for acquiring
residential properties for the purpose of renting them out.
Especially in the major cities, the number of private landlords increased by
roughly one third over the same period of time.
The ACCENTRO Housing Cost Report also shows that a buy-to-let investment in
residential real estate is a paying proposition: IW identified a cost
advantage of nearly 50 percent for owner-occupiers when comparing the costs
of inhabiting a condominium with those of occupying a rental flat. As IW
elaborates in the survey, the advantage can also be applied to landlords,
because it means that the income from rent payments is higher than the
monthly costs of repaying a mortgage loan.

To download the (German version of the) ACCENTRO Housing Cost Report, click
here:
https://www.accentro.ag/wohnkostenreport/ [1]

*About ACCENTRO Real Estate AG*
ACCENTRO Real Estate AG is Germany's market leader in housing
privatisations. In addition to its home market of Berlin, the company
focuses on auspicious metro regions such as Hamburg, Rhine-Ruhr and Leipzig.
In its Privatisation business unit, ACCENTRO retails condominiums from its
proprietary portfolio to owner-occupiers and buy-to-let investors or-bundled
into portfolios-to institutional investors. In its Services & Ventures
business unit, ACCENTRO sells apartments on behalf of investors and property
developers-including through equity investments in its own right within the
framework of joint ventures. ACCENTRO Real Estate AG is listed on the Prime
Standard segment of the Frankfurt Stock Exchange (German securities code
number WKN: A0KFKB, ISIN: DE000A0KFKB3). www.accentro.ag [2]

*About the Cologne Institute for Economic Research (IW) *

The Cologne Institute for Economic Research (IW) is a private economic
research institute committed to a liberal economic and social order. The
institute is organised as a registered pro-bono association. Its members
include around 110 industrial associations and employers' association along
with individual companies. Among its project partners are primarily
foundations, associations, and public-sector institutions.

*Press and Public Relations Contact:*
Karl-Philipp Jann, PB3C GmbH
Rankestrasse 17, D-10789 Berlin
E-mail: jann@pb3c.com
Phone: +49 (0)30 726276-1612

2020-05-26 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

The DGAP Distribution Services include Regulatory Announcements,
Financial/Corporate News and Press Releases.
Archive at www.dgap.de
Language: English
Company: Accentro Real Estate AG
Kantstr. 44/45
10625 Berlin
Germany
Phone: +49 (0)30 - 887 181 - 0
Fax: +49 (0)30 - 887 181 - 11
E-mail: info@accentro.ag
Internet: www.accentro.ag
ISIN: DE000A0KFKB3
WKN: A0KFKB

(MORE TO FOLLOW) Dow Jones Newswires

May 26, 2020 05:59 ET ( 09:59 GMT)


Listed: Regulated Market in Frankfurt (Prime Standard); Regulated
Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich,
Stuttgart, Tradegate Exchange
EQS News ID: 1055311

End of News DGAP News Service

1055311 2020-05-26


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(END) Dow Jones Newswires

May 26, 2020 05:59 ET ( 09:59 GMT)
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