The Pfandbrief 2011 | 2012

cue fund, first and second economic stimulus packages). Via direct (e.g. infrastructure investment)
and indirect (e.g. avoidance of capital bottlenecks by giving support to banks) transmission
channels, this reduces on a lasting basis the danger that property investments might lose
their value – as the following examination of changes in market values shows.
Stable Performance
Back in the days when investment decisions focused mainly on earnings potential, the stable
performance of German commercial properties was considered a shortcoming. This view
has now been relativized given the return to greater risk awareness which downturns usually
produce.
The importance of the German property market as a safe investment haven had already
been demonstrated most impressively during earlier recessions.
Development of Market Values in Established Markets: a Comparison over Time
(Downswing Phases)
110
100
67
90
Index
80
70
60
50
40
Germany Great Britain France Spain
USA
4 8 12 16 20 24
4 8 12 16 20 24 4 8 12 16 20 24 4 8 12 16 20 24 4 8 12 16 20 24
Quarters
Beginning approx. 1990 Beginning approx. 1st half-year 2011 Beginning approx. end 2007
No robust time series were available for the USA for the first partial cycle beginning in 1990.
Sources: Eurohypo RAC Research, realtors
The chart allows us to make a direct comparison over the last three downturn phases in
terms of duration (in quarters), course and intensity of valuation adjustments in the countries
selected. A downturn phase represents the time between the first and last quarter showing a
persistently negative performance. In the case of the current cycle, the phase ends at the latest
at the end of the time series in the fourth quarter of 2010. In Spain, therefore, valuation adjustments
have not yet bottomed out.