Il Report dal Convegno inaugurale di EXPO REAL, a cura di Marianne Schulze, notissima giornalista tedesca ( 7 ottobre 2014)
Although day one of EXPO REAL started quietly, by midday the halls were full. Things then got really full for the opening event in the EXPO REAL Forum, a discussion on “When will interest rates rise? Opportunities and risks for the property sector”.The discussion started with little sign of optimism, with both Karsten Junius, Chief Economist at Bank J. Safra Sarasin in Switzerland and Peter Parlasca, Eurostat Task Force MIP Macroeconomic Imbalances Procedure, EU Commission, Luxembourg, pointing out that economic growth in Europe was slowing considerably and that in general the mood was worsening, even though low interest rates and a weaker euro should actually be promoting growth. The “other side”, as it were, was then put forward by Professor Dr. Lorenz Reibling, Chairman and Senior Partner of Taurus Investment Holdings, USA, who explained that the US was currently enjoying sustained growth and that rising interest rates and a modicum of inflation was regarded as “healthy”. At the moment, he said, it was a fact that more capital from Europe was looking for investment opportunities in the US, than was the case the other way round.
Dr. Bernhard Scholz, Member of the Board of pbb Deutsche Pfandbriefbank, Germany, was also cautious in his optimism, expressing the opinion that high liquidity in the markets and low interest rates were leading at least partly to some misallocation in Europe.
All the panelists were agreed that in the foreseeable future interest rates would rise, starting in the UK and the US, but that the rise would be moderate – “by 2016, there would still be a one in front of the decimal point”, so Dr. Karsten Junius. This was not seen as a cause for concern, as property is a long-term investment with fixed-interest loans, which means that all parties will have sufficient time to adapt to the changing interest-rate landscape.
One topic that was bound to come up in the opening discussion was the subject of rising rents and a cap on rent rises – this being a hotly debated topic in Germany at present. Basically, as all the participants in the discussion agreed, the housing market was working efficiently, because the reason behind the spiraling rents in some locations was mainly high demand. That has nothing to do with the low-interest environment nor in this context is it appropriate to talk of a bubble. A critical question, however, said Dr. Lorenz Reibling, is whether the tenants can also afford the rents. When even small and medium-sized businesses reach their limits as regards what they can pay on rent, then property yields are endangered.