No news from Germany? Oh yes there is….
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Might have been wondering why you didn’t get comments on the German property market recently on our website. Well, that does not mean that there were no news, but we are currently working on a pretty extensive market research project and will give you the results shortly. Right now, what might be of interest to you, is a study published in the German economic magazine CAPITAL (not DAS KAPITAL pls, this is stale dated by centuries and its author does not really have a good name here….), which you can find online in German here. If you need assistance with translation, please send me an email. It breaks down the property market in Germany by looking into 180 cities of Germany and 1800 city regions. The main article gives an interesting overview of the market in Germany. As I said, comments from our viewpoint will follow here shortly and of course comments from you are very welcome.
Reuters Press Release declares German homes “as good as Gold”
Well, today we can refer to an interesting headline of a press release from Reuters; its apparently only availabe in English, at least I did not find its German pendant. “German homes as good as Gold” is what it says. We advise to study that article in its full length. As a comment: We have been saying since the year 1999 on our international website that the German market is stable, secure and attractive for foreign investors. And we focussed on residential not commercial property as this is the really stable market. Read the rest of this entry »
German Property Market stable, says Global Property Guide
We mentioned in our entry of 22 February that the German property market seems pretty unimpressed by the International financial crisis. Just yesterday we received an email from Global Property Guide – which is a company completely independent from ours – stating that the German property market is doing well despite the crisis. Read the rest of this entry »
Berlin Berlin – Time for a good Bargain?
How is the property market in Berlin doing these days? Contrary facts and opinions are the order of the day. But also really good news. In this article we publish an interview which we had with an architect, who overlooks the “scene” from his office in Friedrichstrasse “Am Checkpoint Charlie”.
Ingo Ronski leads the office “Ronski + Burke Architects and Engineers” together with his Partner Fergus Burke.
Mr. Ronski, you as architect and project development planner know the Berlin real estate market since many years. What changes did you notice in the recent months?
I.R.: Recently quite obviously a much smaller number of International Investors is searching to buy on the Berlin market. Subsequently the prices dropped and the situation once again has become interesting for buyers.
ECB rates lowest ever
The European Central bank has lowered the prime rate yesterday to 1.5%. Does that mean the general interest rates will go down on property financing? Not really as due to the refinancing means being short the interest rates on real estate mortgages will still be above 4% on 10 years fixed in average. Once the trust in the banking system has come back the interest rates may go down further but thats totally dependent on the general development of the economy. At a rate of 4.3-4.5% with a ten years fixed interest financing of property is recommendable now.
German Property Market unaffected by Financial Crisis?
The German newspaper FAZ (Frankfurter Allgemeine Zeitung) referred in its Friday 20 Feb. 2009 Immobilien Property section to a recent study done by the Deutsche Städtetag (German council of Cities) where they did a research on sales prices of real estate houses and apartments in 2008. (The full study can be viewed online on their website as PDF-file in German.)* Read the rest of this entry »
Germany: Supreme Court Decision in Favour of Landlords
Owners of residential property in Germany who are not familiar with the rental laws and interpretations thereof, especially in the residential market, can be put at some very unfriendly surprises. Not so much by the fact that the law is supposedly tenant-friendly – that is the case today in many countries of the world and it does have a certain value to protect tenants against arbitraries – no, rather by the fact that one or two small mistakes in a lease contract can have consequences like a clause becoming totally invalid and be costly for the landlord. Such “booby-traps” can be hidden in agreements about contract length, notice periods, monthly utility payments, repairs, wear and tear and last but not least, renovation and decoration. We do not want to go at length into any of these details, but what if you have a newly built or freshly renovated apartment and want to rent it out and get it back in such nice condition at the end of the lease? Virtually piles over piles of court cases have accumulated about quarrels on this subject, until finally one decision of the Supreme Court rolled like and earthquake over Germany in 2004. Since then landlords are very concerned to have the right and correct wordings in their lease contracts.
If you are about to rent out an investment property, make sure that the agent preparing the contract is familiar with the exact wordings needed and also knows about the very latest case decided to the favour of a landlord on 14 January 2009 (BGH, Urteil v. 14.01.2009, Az. VIII ZR 71/08) as this can help you ensure that the renovations be done by the tenant in the end.
Email us if you have any question on this.
Preview on Property Market Germany 2009
Property Market Preview Germany 2009
In this article we will give you a summary on the current scene in Germany, as far as property is concerned. We recommend to read the full article, use the link below.
To understand the „Immobilienmarkt“ or property market in Germany one has to evaluate first of all segments, second locations and third size or volume. From these categories you can practically derive any data you need. The segments to look at are residential, commercial, logistic, shopping and 1a city locations, hotels and all other property.
The locations to look at are major economic power spots, medium sized cities and the capital with its special role in Germany; the rest can be falling under minor towns and countryside. You might also subdivide into “old west” and “old east” but that’s of minor priority here.
The volume segments you need to take into review are above 10 Million, above 3 Million and under 1 Million Euro.
To evaluate the usefulness of informations read in newspapers, blogs, magazines and the faces of friends you have to decide for whom the information is relevant. Thus we recommend to subdivide as user groups four categories: Institutional Investors, Private Equity funds and similar, Wealthy private Investors and Private Investors in general.
Major trends are set by International Institutional Investors and large Investment Groups. Major influences on trends are current economy and consequences of the financial crisis, government and central bank decisions and news agencies. Read the rest of this entry »
Background to the German Property Market
Since re-unification, the east has in effect been subsidised by the richer west of the country. Back in the first half of the 1990s, initiatives in the form of tax incentives offered by the government were aimed at stimulating economic growth in the region and west Germans invested heavily in property in the east creating a “bubble” in the market there. However, without the massive investment required in roads, factories, environmental clean-ups etc, combined with the governments’ commitments on pensions, wider European labour market reforms and entry into the Euro, the economy in the east stagnated and the property bubble burst leaving many wealthy investors out of pocket and reluctant to risk further investment in property anywhere in Germany. The cost of re-unification has been estimated at over $1 trillion (levied by taxation) to the German economy as a whole, with the result that today, property in Germany trades at historically low levels.
Recent economic indicators suggest the situation is about to change. Unemployment is falling and greater fiscal discipline on the part of the federal govt is enabling them to reduce borrowings. A prolonged slump in the performance of the German economy has been matched with a long period of depressed prices in German real estate. This, together with a reluctance on the part of German lenders, banks etc, to offer competitive mortgage deals, in spite of historically low interest rates, explains the general stagnation in the property market and has alerted foreign investors, pushed out of their domestic market due to high prices, to the opportunities in Germany and the low prices on offer.