The CEO of Germany's biggest landlord issued a warning, saying that the country's real estate sector, which is already in its third year of unrest, could suffer more in the future as more businesses fail.

As the industry experiences its worst crisis in a generation, the pessimistic assessment from Rolf Buch, the CEO of Vonovia and one of the country's titans of real estate, defies expectations for an impending turnaround. The German property market, which makes up almost a fifth of the country's GDP at 730 billion euros ($789.64 billion) annually, has been experiencing a boom for years due to low borrowing rates and a robust economy.

When the European Central Bank had to quickly increase borrowing prices due to raging inflation, that boom came to an end. Financing for real estate dried up, transactions collapsed, projects stagnated, big developers failed, and some banks faltered. Berlin has been urged to step in by the industry. Through a series of multibillion-euro takeovers, Buch established Vonovia. When the real estate crisis hit, it was forced to sell off large tracts of property due to its mounting debt.

Following suit, Vonovia, which owns over 550,000 units, reduced the value of its holdings by nearly 11 billion euros in 2023, resulting in the group's largest-ever loss of 6.7 billion euros. Since 2022, when interest rates began to rise and drive down prices, it has removed rent increases and reduced the value of its property by more than 25%. Buch stated that Vonovia has completed its significant write-downs, but he would not rule out more minor changes.