* German property crisis worst in a generation

* Vonovia CEO sees surge in real estate bankruptcies

* CEO Buch: 'It is going to be bitter'

* Despite ECB rate cut, executives cautious on recovery

FRANKFURT, July 10 (Reuters) - Germany's real estate industry, already in its third year of turmoil, faces more pain ahead as further companies go bust, the CEO of Germany's largest landlord warned.

The bleak assessment from Rolf Buch, the CEO of Vonovia and one of the nation's property titans, defies hopes for an imminent turnaround as the sector goes through its worst crisis in a generation.

"We're going to see an extreme number of bankruptcies over the next few months, maybe over the next few years. We're already seeing them today," Buch told journalists on Tuesday.

"It is going to be bitter."

For years, low interest rates and a strong economy sustained a boom across the German property sector, which broadly contributes 730 billion euros ($789.64 billion) a year to the nation's economy, or roughly a fifth of Germany's output.

That boom ended when rampant inflation forced the European Central Bank to swiftly raise borrowing costs. Real-estate financing dried up, deals fizzled, projects stalled, major developers went bust, and some banks teetered.

The industry has called on Berlin to intervene.

Buch built Vonovia through a series of multi-billion-euro takeovers, building up a debt mountain as the property crisis struck, forcing it to sell swathes of homes.

In its wake, Vonovia, which has roughly 550,000 apartments, slashed the value of its properties by almost 11 billion euros in 2023, taking the group to a 6.7-billion-euro loss, its worst ever.

It has cut the value of its property by more than one fifth, stripping out rent increases, since 2022, when interest rates started to climb, knocking prices.

Buch said Vonovia was now finished with big writedowns, although said there could be further small adjustments.

ECB RATE CUT

A recent rate cut by the ECB has sparked hopes of a revival of the sector, but some executives are still cautious.

"Whether or not the ECB changes interest rates marginally will not reverse the trend for property," said Matthias Danne, board member at Deka, one of Germany's largest asset managers with 55 billion euros in property investments.

Elevated rates will keep financing expensive, and a rebound in building sales has been "slower coming than expected," Danne told Reuters.

Germany is the largest real estate investment market on the European continent. The turnover of buildings through sales that often characterizes a healthy market slowed to a halt and is only gradually picking up.

Jones Lang LaSalle, the global real estate consultant, this week disclosed that transaction volumes across Europe's largest economy rose 10% during the first half of 2024 from last year's low level.

The spectacular collapse of Signa, the real estate empire of Rene Benko, has been one of the most dramatic episodes underscoring the industry's troubles.

But weakness in commercial real estate in the United States, with offices still empty after the pandemic, and the struggles of major property developers in China have focused global attention on the sector.

The drumbeat of bad news is continuing in Europe. Last month, a Frankfurt skyscraper that is home to Germany's central bank and asset manager Deka filed for insolvency.

The Apollo-owned property company Demire has revealed it is in talks with investors about restructuring 500 million euros in bonds. It has also said it has been struggling to agree with a bank on a loan. Demire and the bank, DZ HYP, declined comment.

Rents have been climbing steeply as immigrants flock to Germany, foreigners seek work there and house building ground to a virtual halt, squeezing the supply of homes.

Vonovia targets mid- and low-income earners with affordable rents, and Buch said there was fierce competition for flats.

"The market for apartments is going to get worse," he said. ($1 = 0.9245 euros)

(Additional reporting by Matthias Inverardi; editing by Rachel More and Mark Heinrich)