German property – reaching yields other parts of Europe can’t

April 6, 2017

So here is something for you to consider. A business model that works on a number of levels: tax breaks drive demand, huge value-add to properties brought to market, a shortage in property supply and a specialist niche operator with a solid track record of delivering homes to fulfil that demand.

German Housing Supply Limited

German renovated buildingsGermany now has a population of 83 million, which has increased by nearly 3 million since 2009. This coupled with high job growth, creates more pressures on the housing market. Historically there has been a shortfall in house building to keep up with the swelling population’s housing needs. Around 350,000 new homes are needed per annum yet numbers brought to market fall significantly short each year.

In Berlin, the disparity is the greatest, between approved property developments and completions, with 1.9 permits issued for every completed development.

In parallel, the city’s population has risen by about 150,000 and the number of households by 75,000. Forecasters work on the basis that the population will increase by more than 250,000 by 2030. 100,000 houses needed to be built in 2015, but only 15,000 got built.

There is a strong supply of old buildings which need to be modernised and brought into the housing stock pool. About 1% of the German Real Estate market falls into the ‘Listed’ building category, which equates to around 1.1m buildings. Housing Associations don’t want to own old housing stock so they sell on older units in their possession and substitute these by purchasing newer homes.

Germany has pent-up property demand

Tax breaks help incentivise buyers. As a way to address the country’s housing shortage – whilst also making sure buildings of cultural and historical significance were restored – Germany’s post-WWII government introduced a unique tax incentive for higher rate tax payers who refurbish a Listed Building, meaning they are able to claim back up to 100% of the cost of refurbishment.

Home ownership in Berlin is low at about 16% compared with 46% for the whole of Germany. And rents have been on the rise, up 7% in 2016 year-on-year. So there are strong incentives driving home ownership.

A specialist niche property operator

An experienced property provider, who has undertaken 82 projects and managed over half a billion in funds, restores buildings back to family dwellings. They are adept at the negotiations involved to secure these buildings and the management skills required to bring them to market.

Please get in contact to find out how suitable it is for you to get involved in this value-add process.

info@property-venture.com or telephone + 44 (0)1932 849 536

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Property Venture® is an award-winning, European investment property company who helps busy business people enrich their lives through property investment in Europe. The focus is mainly: UK and German investment property, buy-to-let and homes in Poland, Managed Leaseback in France, Spanish property.

On the Advisory Board and a Member of the Association of International Property Professionals (AIPP) the business has been vetted, approved and voluntarily commits to Industry Regulation and the Professional Code of Conduct. We are known for our quality customer service and non-pressurised approach to sales. 

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