by Alex Müller
on February 20, 2007
European Housing Review 2007 – Executive Summary (pdf)
Summary of trends in the major European countries. Worth reading.
Here is what they say about Germany:
The housing market was broadly flat in 2006, although the
long slow decline of recent years seems to be over. It has been
helped by the fact that the economy is finally beginning to pick
up after several years in the doldrums and consumer
confidence is rising with it. Most mortgage borrowing is based
on fixed-interest rates, so that interest rates are less affected by
what the ECB does but rather influenced by changes in capital
market rates. Mortgage interest rates rose throughout 2006 but
only moderately and were still below their mid-2005 levels,
so unlike many European countries the housing market was
not particularly adversely affected by interest rate movements
during 2006.
In 2005, house prices had been falling, especially in real terms,
continuing a three year long process of moderate decline.
So, a price turnaround might finally be about to occur.
However, the prospect is for only limited change over the next
few years. The idea suggested by some commentators that the
German housing market is a sleeping giant which, when woken,
will roar in action with a burst of high price inflation remains an
elusive dream.
Housebuilding rates have been subject to some marked swings
in recent years induced by subsidy and taxation changes but are
not expected to grow much over the next few years because of
the relatively quiescent state of the housing market.
In general, German regional housing markets have had mixed
fortunes over the past few years. Prices and rents in several
major cities in the West have increased moderately in response
to rising demand. In other places, however, previous excess
supply has left the market depressed in the face of poor general
local economic conditions. In particular, the East is still suffering
from substantial oversupply, which is contributing to weak prices
and rents.
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by Alex Müller
on February 13, 2007
Here is how Real Estate Investing 2.0 works:
Fly into a major city, most likely with you own jet, hop on a helicopter with the real estate agent and spend 30 minutes in the air.
After flying over the area of interest and some explanations for the real estate guy, you head back to the airport and decide on the places you want to buy.
Apparently this really happened a few days ago when one of the google guys came to Berlin to spend some money on real estate.
Total time in Germany: 2 hours
Investing sum: not disclosed
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by Alex Müller
on February 13, 2007
Angelina Jolie and Brad Pitt, bought a flat in Berlin. According to some rumors they now own a 600m² (6500sft) Penthouse in Berlin-Mitte. We are pretty sure the flat is all ready perfect but Lars Krückeberg, Wolfram Putz and Thomas Willemeit, from graftlab friends and architects of the couple will help to make it outstanding and unique.
Maybe its not the best area and not the best location, but it’s the best private pool view in town.
In case you want to have a bigger pool with the same view you can buy a free lot in the same street.
For fans with a even lower budget a one-bed-room across the street.
And for tax-savers there is a nice prewar house around the corner.
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by Alex Müller
on February 11, 2007
With his three key investment factors in mind, Lu’s tip for 2007 is Berlin. Property prices in the German capital, which start at around £690 per square metre, are on a par with emerging Eastern European cities. Compare that with other Western capitals, with average prices of £3,440 per sq m in Paris or £9,000 per sq m in prime central London.
“Before reunification, most of the property on the West side was owned by big private institutions and property in the East was Government-owned, so German people did not have the opportunity to own homes and the market has been depressed for a long time,” Lu explains.
“The city has the cheapest house prices in the Western world and the lowest rate of home ownership at just 10 per cent,” he adds. “Prices there have hit rock bottom after falling every year for the past decade, but now they are on the turn. Buy now and you are entering the market at the beginning with a chance of good capital appreciation.”
Source
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by Alex Müller
on February 11, 2007
The government is selling off large quantities of housing after a decade of suffering with a flat market but as this accommodation moves into private ownership, rents are being pushed up, according to Berlin Capital Investments.
In addition, the buzz around the German property market has induced an unprecedented level of competition among German banks, who are diversifying their mortgage products, making it easier for investors to finance their acquisitions.
Source
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by Alex Müller
on February 11, 2007
During a session titled, “Global Hot Spots — How to Think about Hot Foreign Markets,” Wharton real estate professor Peter Linneman called on each panelist to describe the markets they find most intriguing. “How much is hype? How much is reality?” he asked.
Stuart Rothenberg, managing director at Goldman Sachs and head of its real estate principal investment area, said his company is most interested in Germany. The country has property available that generates strong yields, a recovering economy and efficient financing. In addition, German banks are liquidating large portfolios of non-performing loans, creating opportunities to buy residential property with yields of 4.75% to 5.25% and commercial property yielding just above 5%.
Rothenberg is optimistic about the German market because new supply has been limited by a sluggish economy, until now. Recently, multinational corporations have expressed interest in establishing German headquarters, which will drive down vacancy rates. Governments, he added, are taking steps to speed the pace of privatization. Goldman Sachs’ first German acquisition was a state-owned residential portfolio in Berlin. “The only bad news about Germany is you are competing against a lot of German funds,” he said.
Read the entire article in pdf
Source (registration required)
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by Alex Müller
on February 2, 2007
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by Alex Müller
on February 1, 2007
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by Alex Müller
on January 10, 2007
FT.com site, Jan 02, 2007
Investment in German commercial property is at a record high, boosted by the flood of foreign investors who are betting that the recovery in Europe’s largest economy will at last trigger rising demand for offices and shops.
The volume of German commercial property transactions more than doubled to €45bn ($59.8bn) last year from 2005, according to figures by Jones Lang LaSalle, the property consultant and investor. Activity is at an all-time high and foreign investors account for 79 per cent of the deal volume.
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