The King Sturge Real Estate Economy Index – which measures sentiment in the German property industry as well as wider economic data – has hit a new negative record.
King Sturge said the collapsing investment market was to blame for the plunge in confidence.
The index dropped to 40.7 points in December, down from 48.2 the previous month – a 16% decline.
Sascha Hettirch, managing partner of King Sturge Deutschland, said: 'The transactions volume is down to a minimum, with the real estate economy regressing to the level of 2002/2003. It makes a person wonder how far we have to go yet before hitting rock bottom.’
The wider economy was making the fall accelerate, the survey found. In June 2008, the mood was still positive about real estate, with an index of 101 points. However it dropped rapidly to reach 40.7 in December.
Both the rental climate and investment climates measured in the survey have dropped, with the willingness to invest getting close to zero in December.
Survey participants suggested that residential real estate was the most stable segment.
Hettrich said there were some positives.
He said: 'This coming year is starting off on an ominous note: every climate index value has been pointing downward for months. High net worth investors, however, have ample opportunity to make interesting investments. Here, perfect timing is of the essence.’