Germany will continue to be Europe’s top pick for global property investment
For the past 10 years, property price in Germany has recorded steady growth. Due to noticeable population and employment growth within its major cities combined with a limited housing supply, we believe “Safe Haven” Germany will continue to be Europe’s top pick for global property investment.
PwC’s Emerging Trends in Real Estate-Europe 2018 Report states German cities have taken 4 of the top 10 spots in Europe’s scorecard of prospects. Among the top 10, Berlin and Frankfurt are the first and second most desirable cities for investment and development in Europe.
According to Deutsche Bank’s The German Housing Market 2018, house and apartment prices in Berlin and Frankfurt have increased 10% and 15% year over year respectively in 2017. Rent growth in Berlin accelerated from 7% in 2016 to 11% in 2017, while rent in Frankfurt also rose by 8% in 2017. However, given the strong price growth in recent years, the prices in Berlin and Frankfurt are still very favorable to global investors compared to other major cities like Munich or London where house prices are easily double.
Apart from strong economic, population and employment growth, the housing supply shortfall with increasing demand have been one of the key driving factors of the housing market in both cities. The Berlin population increased by 200,000 in 2017, yet the housing supply is still far below the demand. Frankfurt’s population is growing by 8,000 per year and there was a shortfall of 50,000 residential units in 2017.
Brexit also seems to be one of the driving factors for the German real estate market. Some international banks, like Goldman Sachs, Westpac, Mizuho Securities and Citi have been planning to move more operations to Frankfurt before the Brexit impact hits London. An influx of foreign high-skilled and high-income workers also supports the growth of rental and housing markets.
In terms of tax and purchase costs, residents and non-residents are treated the same in Germany. There are currently no restrictions or additional stamp duty for foreign buyers. Also, buyers may also benefit from the capital gain tax exemption if they hold the property for 10 years or more. However, since most of the official documents and contracts are written in German, investors who do not read German shall seek advices and services from real estate professionals and notary during the buying and transaction process.
We offer a portfolio of real estate properties in some of the most sought-after locations in Berlin and Frankfurt. Should you have any enquiries, contact our professional team for more details.
Berlin’s Most Prestige Duplex Penthouse
Located in Diplomatenpark, on the southern edge of Tiergarten Park, a penthouse with the break-record transaction before, making a big splash in Berlin. Apart from the prime location in the Embassy district, this apartment also comes with luxury facilities, including private gym, sauna, and
Elkon Apartment
Berlin, Germany
Property ID: 365695
| Saleable Area | Approx. 7,000 s.f. |
| Terrace | Approx. 3,000 s.f. |
| Layout | 6 Beds | 5 Baths | 8 CPs |
| Price | Price Upon Request |
Originally published in COLLECTION, 1 January 2019
