Overseas Property Bundesbank Says There Is No German Bubble

Andreas Dombret, German central bank executive board member, said he dismissed fears of a German property bubble in comments published in Saturday.

‘A panic is not justified,’ Mr. Dombret said, in comments published by business weekly WirtschaftsWoche. ‘Even if there are signs of an exaggeration in preferred areas of some German metropolitan areas, one should not speak of a real estate bubble.’

Mr. Dombret’s comments are a response to fears that rising prices in Germany’s major cities, especially Berlin, are the beginnings of a bubble. Voices like the Financial Times’ and Economist’s began to be raised in the fourth quarter of last year, suggesting that Germany was facing a potential bubble. Reports of Berlin’s house prices rising by 37.5% since 2009, while other Eurozone prices fell, sometimes by as much as 50%, appeared in the Financial Times. Property consultancy Jones Lang LaSalle reported last year that Berlin’s house prices had risen by 20% in the year to June 2012.

Low interest rates, instated to aid recovery, are thought to have tempted some Germans into the property market, which is normally sleepy in this low-ownership country. At the same time, investors rather than purchasers are thought to have been tempted into the property market as protection: a lower income, but a more certain investment, and a safe place to put capital during the economic crisis. ‘The flight into supposedly safer assets such as property is being reinforced by the lack of investment alternatives,’ according to Stefan Mitrolpoulos, an analyst at German bank Helaba.

Foreign buyers are also inflating the German housing market, and Anne Riney, director of the Berlin-Mitte office of estate agency Engel & Volkers, reports high investment from ailing Italy and Spain as well as the Nordic countries. ‘People are afraid to have their money in the bank,’ he says,’ and Germany is the most stable economy in Europe.’

Germany’s inflation rate has remained above the ECB’s Eurozone target of below 2% for much of 2012, as its economy outperformed European peers. Germany’s buoyant economy has fuelled robust wage rises, and house prices have risen too, well above the rate of inflation; in 125 German cities, house prices rose an average 5.3% compared with the previous year.

In large part, Mr. Drombret’s comments echo a September 2012 Deutsche Bank report which assessed the risk of a price bubble in German housing. The report stated that the price rises in housing had not ‘been financed using credit, but were triggered by portfolio rebalancing,’ and went on to suggest that the rises represented ‘a return to normal rather than an exaggeration.’

However, the outlook for the German economy as a whole is rockier than its housing market would seem to suggest. Moody’s has put a negative rating outlook on all the core Eurozone countries, even Germany, the bloc’s largest and strongest economy. Only Finland escaped the dour prognosis from the US rating agency.

And there may be a trap, hidden in the German property market, that won’t be sprung for ten or fifteen years, when refinancing time comes around. ‘Many households that are currently buying housing property with large loans at around 3% could have trouble refinancing,’ Mr. Mitropoulos pointed out. The German 10-year average mortgage rate in the decade up to 2000 was 7.7%, more than double current rates.

However, concerns about the near future are unfounded, Mr. Dombret insisted: ‘Excessive credit growth is typical for a bubble and you don’t see that here in Germany,’ he said. ‘Real estate is solidly financed.’ (Source)

West Berlin Back in Style as Fashion Brands Abandon the East

West Berlin’s Kurfuerstendamm, the city’s answer to Paris’s Avenue des Champs Elysees, is in fashion for the first time since Germany’s reunification as luxury brands snub the east, pushing rents higher.

Apple Inc. (AAPL) may be the next company to appear on the 4- kilometer (2.5-mile) boulevard known as Ku’damm, in the capital’s most expensive shopping district. The iPhone maker will open a store there, its first in the German capital, this year, a person with knowledge of the plan said. The person asked not to be identified because the information is private.

The decision by fashion brands such as Hermes and Louis Vuitton (MC) to focus on west Berlin has shifted attention away from Friedrichstrasse, the eastern strip that attracted most retail investment after the fall of the Berlin Wall in 1989. That helped rents for the best space on Ku’damm to climb the most in 15 years in 2012, an increase that was more than twice the rate for Munich’s top shopping street, CBRE Group Inc. (CBG) estimates. (Read More)

Why invest in Berlin apartments

Have you recently made a profit thanks to your business and want to invest your money in something that has nothing to do with your business? You should know that numerous people choose to invest overseas and you can do the same thing. For example, you should choose to invest in Berlin apartments. Why should you choose the Berlin apartments in the detriment of other cities around the world? Well, numerous beautiful apartments that deserve your attention are available for affordable prices in Berlin, which is one of the main reasons why you should invest your money in such an apartment. In addition to this, there are plenty of companies in Berlin that can take care of the problems that have to do with the furnishing of the apartment, so you won’t have to spend extra money on plane tickets in order to fly to Berlin and take care of these details by yourself.

Another reason why the Berlin apartments represent such interesting and great investment ideas is represented by the profit that they can bring. You can choose to buy, for example, a classic apartment located in a classic factory building, you can refurnish it and maybe even change a little bit the interior by breaking a wall or building a new one and you can sell it for much more than it originally cost. You can cover the refurnishing costs and even make a profit, so it is clear that the Berlin apartments represent a very wise investment. This option should be chosen by those who are very active individuals and who know that they have the necessary energy to take care of such a business. Those who are a little bit more comfortable can choose to buy a nice, elegant apartment located in a great Berlin area and they can rent it to a family or to business people who travel to Berlin and have to stay in the city for months in order to manage their businesses. Renting an apartment that looks nice and that is located in a good Berlin area can cover the initial apartment costs in just a few years and then bring a lot of profit.

Of course, the second option that stands at your disposal is a long term investment, but it is a way in which you can make a lot of money. Numerous people bought apartments in Berlin a few years ago, improved them and then rented them and now they can a constant, monthly profit that cannot be ignored! You can be one of the people who make a lot of money by investing in Berlin apartments, so test the market, see what you can buy and see what apartments can be improved and transformed into amazing places to live. These apartments can bring you a monthly profit that you can enjoy for the rest of your life, so it is clear why the Berlin apartments represent such an important interest for investors from all the corners of the world.

Boomtown Berlin – Between History and Modern Spirit in the Heart of Europe

Berlin’s real estate market is quickly becoming a hot spot for foreign investors. Not only is German property perceived as a stable investment amidst crisis times, but also the macroeconomic factors indicate a favorable trend for investments in real estate. The main benefits of investing in Berlin include the following:

The City has a High Growth Potential

Because of the amenities the city offers as well as the low living costs Berlin’s population is on the rise and the growth is expected to continue during the next two decades. In December 2011 Berlin passed the 3.5 million mark of registered citizens. According to a forecast made by the statistical office Berlin, the capital’s population is expected to grow to 3.752 million people, which makes up a 7.2% increase compared to 2011. Accordingly, the demand for housing will increase, and real estate investors will benefit the most. In addition to that, capital gains prospects are greater in Berlin than in other towns in Germany.

Average Price Less Than in Most European Cities

Berlin has some of the lowest property purchasing prices in Europe. As a matter of fact, the cost of buying property in Berlin is approximately 3 times less than the cost of buying property in London or Paris. This has made this city an attractive alternative for foreign investors seeking to own part of this great metropolis.

Europe’s Silicon Valley

As Berlin becomes the Silicon Valley of Europe, venture capitalists are increasingly setting up base in the city. The Berlin Chamber of Commerce reports that 1,300 Internet startups have been founded since 2008. This has created employment for thousands of local residents and is increasing the city’s attractivity to young professionals. Berlin has also risen ranks to become the third most visited city in Europe.

Skyrocketing Rents

Berlin is a rental market – about 86% of the inhabitants are tenants. The apartment vacancy rates have decreased from 8% to 2,3% in the past 5 years. This growing demand is accompanied by rising rental prices in Berlin. These have been increasing steadily over the past couple of years. Investors have rushed to renovate existing buildings in order to take advantage of the high rental prices. According to the German tenant’s association, the rents could increase up to 10% in 2013.

Cultural Diversity

Berlin is currently one of the most popular destinations for tourists and an important transportation junction in Europe. With its conglomeration of styles and cultural influences, Berlin’s unique character offers young employees, artists and musicians from all around the world a perfect venue for their work and lives.

All in all, the metropolis Berlin is one of the top attractive cities for investing in real estate. (SOURCE)

Berlin office space market makes record result

The Berlin office space market has charted a record result for the second year in succession. Last year’s very strong showing of 685,000 sqm of total rented office space was eclipsed in 2012 with a floor space turnover of 693,000 sqm. The rental volume for 2012 is therefore 47% above the average for the last ten years. In the second and third quarters in particular, Berlin companies proved very active in terms of leasing. Floor space turnover stood at an above-average 190,000 sqm over the two summer quarters. A solid result was achieved at the end of the year too, however, with a quarterly turnover of 173,000 sqm.

According to Cushman & Wakefield, the Berlin office space market showed itself to be highly stable in all size segments. As in the previous year, contracts involving rental spaces under 1,000 sqm made up some 41% of rental turnover. Leasing activity in the other size segments was similarly stable. Rental dealing in the +5,000 sqm size segment was especially constant. These large-space contracts once again contributed 31% to the annual total. “A shift must be pointed out in this regard, however”, adds Lisa Ebert from the Berlin office rental space department at C&W. “Whilst we recorded four contracts north of the 10,000 sqm mark in 2011 totaling 103,400 sqm, this was ten contracts over the past twelve months with a total volume of 170,400 sqm. This is a decidedly positive sign for the metropolis, as it was not only public institutions – which are traditionally important for Berlin – that concluded several large-space rental agreements this year, but also the consultancy firm PricewaterhouseCoopers (24,400 sqm) and Zalando, the rising star of the online scene. The online mail order company concluded three deals north of the 10,000 sqm mark over the past year alone (a total of 58,900 sqm), and, in so doing, very clearly tied itself to its home location in Berlin for the long term”.

The extensive rental activity of Zalando in particular allowed the market share of commercial enterprises to climb to an above-average 13% (92,400 sqm). Commerce thus took a leading position in terms of floor space turnover – even ahead of the public sector with 12% (83,900 sqm) and consultancy firms who contributed 10% (67,000 sqm) to the annual turnover. Important contributions to turnover in 2012 continued to be made by institutions from the fields of education, social services (10%) and companies from IT/EDP and communications (8%). “With annual turnovers in part significantly above the 50,000 sqm mark, the IT sector has developed into a stable size on the Berlin market over the past three years”, explains Ebert. “Combined with Berlin’s so-called ‘creative scene’, the companies and start-ups from the IT sector are ensuring that the capital now enjoys the reputation of a second Silicon Valley, way beyond the borders of Germany, too.”

Vacancy rate falls again
The Berlin vacancy rate has fallen in each quarter of the last two years. It currently stands at 7% (December 2011: 7.8%). At the end of 2012, the total stock of office space in Berlin amounted to 17.54 million sqm, of which 1.23 million sqm were available for short-term lease. “We are expecting a continuation of this downward trend in 2013”, states Ebert. “The building completion volume may climb only slightly over the coming year to 138,000 sqm. As of now, approximately 50% of this has already been pre-leased. If the Berlin market continues to be as active as it has been over the past months – and there is much to indicate that it will be – then the volume of available space will also fall”. Directing her attention towards the qualities of the space in offices currently vacant, the consultant continues: “Anyone now looking for modern office space with a rental area of over 2,000 sqm won’t hit the jackpot too quickly. At the moment, the Berlin market simply doesn’t have stock of such floor space in sufficient volumes. The first companies that came to this conclusion and signed rental contracts in project developments are, for example, PricewaterhouseCoopers at Kapellenufer (24,400 sqm) and Zalando at the “Hotel & Office Campus” in Friedrichshain (19,200 sqm)”. In total 111,000 sqm of new office space was completed in the federal capital last year.

Prime rent on upward trajectory
In the final quarter of 2012, the prime rent rose from € 21.50 per sqm per month to € 22.00 per sqm per month; and it may also stay on a slight upward trajectory through the coming year in view of the continued dearth of available space in the high-quality segment. Berlin rental price levels appear to be altogether very stable in all sub-markets.

“We are anticipating the coming twelve months on the Berlin office space market with cautious optimism”, explains Lisa Ebert. “At the start of the new year, the German economy appeared to be on a sound footing, and Berlin-based companies did not prove to be too affected over the past months by the altogether negative economic outlook. Although it appears unlikely that as many large transactions will be able to be concluded as successfully again in 2013, we still feel, one way or another, that the Berlin market – which is currently set up pretty well – will achieve another great result over the 500,000 sqm mark once again this coming year”. (Source)

Germany: economy grew by 0.75 percent last year

BERLIN — Germany’s vice chancellor says the country’s economy, Europe’s biggest, grew by 0.75 percent last year and recent data send upbeat signals for growth in 2013.

The figure for last year compares with much stronger growth in 2010 and 2011 of 4.2 percent and 3 percent respectively. But Vice Chancellor Philipp Roesler describes it as “robust,” while several other countries in the 17-nation eurozone experienced recessions.

In mid-October, the government forecast growth of 0.8 percent in 2012 and 1 percent this year.

Roesler said Monday that the final quarter of last year was “somewhat weaker than we expected,” without elaborating. He noted, however, that recent industrial orders figures and other indicators suggest the weak phase was temporary.

Read more here: http://www.miamiherald.com/2013/01/07/3171104/germany-economy-grew-by-075-percent.html#storylink=cpy

Tucking in to Berlin, a city of boho bars, gourmet markets and all-night restaurants

‘As long as there are customers, we’ll serve them. Four, five in the morning — whenever,’ says the super trendy waiter in Katz Orange, a restaurant housed in a cavernous converted brewery.

To our shame, it’s only 10pm and we intend to be tucked up by around midnight. Which is a poor show because this city doesn’t really do early nights.

Less frenetic than New York and cheaper than Paris, this is the place to come for buzzing night-life, fabulous food, and history at every turn.

It is my third visit to the city, but I’ve yet to develop the stamina of its inhabitants. My boyfriend and I are here for three nights, renting a studio in Prenzlauer Berg, a bohemian neighbourhood in Berlin’s old East.

If you’ve watched Florian Henckel von Donnersmarck’s superb film, The Lives Of Others, you’ll remember it as the home of the protagonist, playwright Georg Dreyman. It’s a charming spot to while away lazy mornings or rainy afternoons in preparation for the exertions after dark.

The city centre is a ten-minute underground ride away. There, if you’re feeling studious, you can tackle the endless museums and monuments the guidebooks recommend. Or you could simply go for lunch — which is as good a way of getting to grips with Berlin’s past as any.

At Mogg & Melzer, traditional Jewish fare, such as home-smoked pastrami, is served with helpings of history. The restaurant is housed in an old, Thirties Jewish girls’ school. In the hall, noticeboards recount how the school was closed in 1942, its pupils and their families sent to Hitler’s death camps.

The instruction continues on the street outside. Literally. Looking down, we notice the little gold  plaques which glitter from the pavements. They are engraved with the names of Berliners who died in the holocaust.

Even the traffic lights tell their own tale. In the city’s old West, pedestrians are instructed to cross the road by a green man symbol, much like in Britain. In the old East, however, the green man is replaced by another figure, known locally as Ampelmännchen.

Well-built, sporting a jaunty hat, and striding confidently, the Ampelmännchen symbol was devised in the Sixties by the communist East German authorities as a more ‘powerful’ symbol than the effete Western counterpart — the epitome of a strong, hardworking comrade.

Goodness knows what Comrade Ampelmännchen would make of the fancy boutiques around Hackescher Markt. Ironically, the city’s modern shopping hub was once part of the old East. Today there are big-brand designer stores alongside quirky independent shops.

In the ‘Made in Berlin’ second-hand-shop, my boyfriend snaps up a Nineties-style check shirt while I peruse the Forties fur hats. Berliners might not have the chic reputation of the French, but this is a stylish city.

The cycle lanes that run parallel to every road are packed with hipsters in faux-fur coats atop  fixed-gear bicycles. Cycling in the cold is best left to locals. But any winter visit to Berlin must include one of its famous outdoor markets. (For Full Article Click Here)