The sobering macro-economic sentiment has spilled over into the real estate industry in Germany dashing hopes for a strong recovery in 2010. The poll-based Real Estate Climate, mirroring the industry sentiment, clearly suffered in the May survey of the monthly King Sturge Real Estate Economy Index.

Compared to the steep increases of previous months, the sentiment gained only 1% in May. 'Evidently, the healing process has taken a rather disappointing turn, and it appears to be far from completed,' observed Sascha Hettrich, Managing Partner of King Sturge Deutschland.

Hettrich said there were at least two reasons for this. 'For one thing, the macroeconomic environment must be described as extremely fickle then as now, and among the indications that confirm the verdict is the slow economic growth during the first quarter. Secondly, we keep seeing surprisingly drastic setbacks - with the financial markets leading the way. It seems that the real estate industry will have to brace itself for a rather tough phase in the market recovery, and the latter may actually not bring a genuine boom before 2011.'