Germany is the World’s 3rd largest economy and the biggest and most populous in Europe, with 82m citizens. The country offers lots of property investment opportunities, from city-centre conversions to suburban, new build, buy-to-let and tax efficient investment vehicles.
Germany was divided into the democratic West and the Communist East (German Democratic Republic) after the second World War. The Berlin Wall became not only the physical divide between the two sides of the country, but remains the symbol of its former division until 1989, to this day. After the credit crunch of 2007 mainstream property prices rose by 7.4% in Germany, but fell at a similar rate over the same time period across the wider Eurozone.
Berlin - capital city
Home to the German Parliament, housed in the 'Reichstag' building. Berlin is a relaxed city, at ease with itself. It has clearly come a long way, uniting the East with the Western parts of the city. Some of the most interesting property developments can be seen in newly renovated, former East Berlin areas. Developments like Straulauer Allee, combining trendy living and forward-thinking, modern workspace on the banks of the river Spree.
In the centre of Berlin developments and refurbishments are taking place in and around the major tourist attractions and buildings. On streets like Wilhelmstrasse, near to the Brandenburg Gate. These offer a pied-a-terre for those who want to be at the heart of the city and within walking distance of the city centre, or a stone’s throw from the underground U-Bahn station.
Berlin is home to some impressive modern shopping centres, just take Potsdamer Place for example with its impressive Arkaden with more than 130 shops spread over three floors, attracting the cosmopolitan crowd seeking retail therapy.
Berlin combines art, culture, nightlife, museums theatres and a great nightlife. Attracting many nationalities to its heart, including about 14,000 British citizens. Lower costs of housing are attractive compared with London and comparisons are drawn between it and the East End of London pre-gentrification.
While London tenants reportedly spend 72% of their earnings on rent, Berliners pay out just over 20%. In an effort to keep rents affordable, Berlin is the first city to embed rent caps in law, preventing landlords charging new tenants more than 10% above the local average, for inner city homes. However, newly built properties and those that have undergone wholesale renovations are exempt from the restriction, in order not to discourage investment in building projects. Yet the housing market remains competitive. Incrementally there are 40,000 more inhabitants per year. Because of this situation the housing market is very strong, making flat-hunting highly-competitive and a good place to be a buy-to-let landlord.
The city has a population of 1.4 million but attracts 5.7 million tourists each year. Munich remains popular with many wealthy Germans and an increasing number of international buyers. Latest estimates suggest around 5% of home buyers in Munich purchasing properties over €2 million are from abroad with Russian and Middle Eastern buyers most prominent.
Munich’s excellent hospital and medical facilities, on a par with London’s Harley Street, are helping to attract interest from Kuwaiti, Saudi Arabian and Qatari buyers amongst others.
At €4,200 per square meter, mainstream prices in Munich are among the most expensive in Germany compared to €3,100 per square meter in Frankfurt and €2,200 per square meter in Berlin. However, property prices still compare favourably with other European cities.
To see what property investment opportunities are available in Germany, click here on German Property. If you cannot find what you are after, please contact us on +44 (0)1932 849536, as we have lots more properties than are shown on the website.
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