In the recent Catella newsletter Statements, she said that in the medium term the German real estate market will be one of the better performers, benefiting from its solid economic base. "Germany benefits from the relatively stable economic situation, and will most likely remain attractive for investors," Becker said, noting that German investors were the most active buyer group on the European market in recent months, followed by those from Mid-East and Russia--partly due to the more than €3 billion collected by open-end property funds.

"Many companies are making the most out of this positive situation, and have started investing in real estate again. In doing so, they are making an essential contribution to the recovery of the global real estate markets," she said.

Short term however, credit would be key. "Most banks still restrict their lending to limited loans at very expensive terms. At the moment, financing is still easiest to obtain for residential real estate, and many market players do not expect to see a sustained recovery of the European credit markets before 2010."