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18 Management Report – münchener Hypothekenbank eg l annual Report 2011 apartments only rose in individual cases, above all in major urban centres and particularly in Paris and London. The mar- kets developed very differently on a nationwide basis with a few urban centres holding up well while the volume of trans- actions and purchase prices generally fell further in rural regions. “Residential property markets in many European countries were burdened by the weak economy and the sovereign debt crisis.” Attractive interest rates had a favourable effect. However, they did not add momentum to new residential property financing business as the criteria for granting loans still remained very restrictive. In addition to Germany, the Swiss residential property, in par- ticular, also remained in stable condition. A high level of con- struction, unchanged inflows of immigrants, and the low level of interest rates had a favourable impact on the market. Pur- chase prices again rose notably last year with prices for con- dominiums rising a bit faster than prices for single-family homes. Fears that the residential property market in Swit- zerland was overheating were heard in some cases among experts. Demand for rental properties was high in European metropolitan areas. This meant that both rents and yields from rental apart- ments paid out to investors, especially in the UK, rose further. The difficult situation in the residential property market in the USA remained unchanged. House prices fell again as unem- ployment figures slowly contracted, lenders kept conditions tight, and overall economic conditions remained uncertain. In contrast, the market for rental homes recorded a notable upswing as vacancy rates decreased and in some cases rents paid grew at a rapid pace. As a result national and interna- tional investors focused their attention even more on this market. The financing market for this class of property was marked by intensive competition, especially between banks and life insurance companies. Commercial Residential (only portfolio) Source: Ernst & Young Research, January 2012 Development of commercial property transactions in Germany 2007 - 2011 Figures in € billion 2007 2008 2009 2010 2011 3,8 10,1 3,3 12 53,3 4,8 21,1 19,1 5 23 70 60 50 40 30 20 10 0 Commercial property – Germany The German commercial property market developed favoura- bly last year, as investors viewed Germany as a stable place. The volume of transaction rose by a good 20 percent to about € 23 billion. Investors were primarily focused on retail and residential property portfolios. More than € 10 billion was in- vested in German retail properties in 2011, or almost as much as the total sum invested in the previous two years together. Investments in residential property hit a three year peak with € 5 billion. The rental market for office properties was robust and asserted itself in the face of worsening overall economic conditions. Rented office space in major German metropolitan areas increased to about 3.4 million square meters as vacancy rates fell and top rents paid climbed or, at a minimum, remained stable. As in the previous years both investors and providers of financ- ing remained focused on core properties: easy-to-rent, prime