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Investment Overview

Up until recently, investment property in Germany may not have been high on the overseas property investor’s list due to a market that has remained stagnant for years. However, the country with the third–largest economy in the world, the largest population of any European Union country and a well–established infrastructure is seeing positive changes to its real estate market.

Demand set to rise

Analysts have begun to detect signs of renewed interest in investment property in Germany, as well as signs that the inactivity in its property market as a whole is coming to an end, with demand from both residents and investors set to rise. The low rents in the capital are currently made possible by the government, who own a large proportion of the rental property. However, the level of the government’s debt is forcing a change, and it has already started to sell off much of its property, mostly to UK– and US–based firms. As a result of this, rents will rise and many tenants will start to consider purchasing a property. Another factor increasing the ownership of homes is more competitive mortgages available from German lenders to match financial products on offer to German residents from competitors across Europe.

Increased real estate activity

Individuals considering an investment property in Germany should take note of the larger institutions who are already aware of the benefits of investing in German real estate. Germany was highlighted as one of the ‘big three’ markets in Europe for direct investment into real estate by Jones Lang LaSalle, having increased its share of total activity. Tony Horrell of Jones Lang LaSalle commented, “Germany’s relative attractiveness has increased significantly due to a unique combination of willing domestic sellers, underweight cross–border investors, positive yield spreads and a recovering economy”.

Berlin: Cheap property and record investment

Property in Berlin, one of the focus cities for those looking to invest in Germany, is particularly cheap for a capital city: it is possible to pick up an apartment for little more than a tenth of the equivalent in London. Record levels of investment (€4.3 billion into the property market in 2006, 76% of this from foreign investors) are changing the face of Berlin with signs of a more affluent city emerging. Price growth in residential property has already started, suggesting that 2007 may be the year that sees a substantial turnaround in Berlin’s property market.

Related items

Documents and Reports

	Germany property investment report (409Kb)
	Germany country guide (860Kb)
	Germany property buying guide (953Kb)
Documents and Reports

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