The real estate market in Germany is attracting more and more international investors from all over. The investors are noticing Germany’s main cities as wise investment moves, especially from those that come from southern Europe, China, the USA and the Middle East.
Only half of the houses that experts estimated are needed in Berlin each year were delivered in 2015 – 10,722 of 20,000. This shows that there may be a shortage of properties available as demands are on the up.
There are very few signs that this will change anytime soon too, which may cause problems for international investors who are eager to invest in major German cities.
The biggest cities across Germany are attracting such a high demand due to the expanding population too. A lot more people are moving to already-populated areas and tourists are increasingly visiting. This puts pressure on property values and rental prices, both attractive elements to property investors. It puts them in a worthy position, where making choices become easier.
A report from Knight Frank highlights that the city of Berlin increased in population, especially throughout 2015. It rose by 40,000 and household numbers are expected to go up by 74,000 from 2015 to 2020.
Despite this projection, new houses aren’t being built. On top of that, home ownership levels in German cities are relatively low compared to the European average. Only 15% of the German property market have their property lived in by them, as many people tend to rent their home, which appeals to buy-to-let investors.
The Knight Frank study shows that demand from renters is at its greatest in Berlin. However, there appears to be a lot of safeguarding policies around the real estate market in Germany to prevent a ‘boom and bust’ situation.
Kate Everett-Allen, head of international residential research at Knight Frank, said: “Mortgage lending is now highly regulated. Capital gains tax is charged on all properties sold within two years of purchase, or in the case of buy-to-let homes, ten years, to discourage speculation.
“Landlords and investors instead see the measures as pillars of support which help bolster market confidence and minimise risk.”
From a property investment perspective, this is all great news and German residents and international investors alike are set for a very interesting year, where popularity is set to soar. Keep track of German property news to really get to grips with the German property market.
Keep track of German property news to really get to grips with the German property market.
Written by Gemma Smith