Berlin’s Tegel Outpaces Rivals as Doomed Airport Draws Travelers

Berlin’s Tegel airport has subsisted by chance alone, defying the odds as passenger growth outpaces every other major hub in Western Europe.

The airport reported passenger growth of 7.9 percent last year, more than twice the pace of London Heathrow, the busiest hub in Europe. Compared with Frankfurt’s 0.9 percent advance, Tegel’s passenger inflow was downright explosive.

Tegel’s boom is also its swan song. An hour’s drive south of the hexagon building lies a 4.5 billion-euro ($6.1 billion) replacement hub fit to accommodate the millions of tourists flowing into Germany’s capital. The only catch: the new airport should have taken over two years ago, before technical faults derailed the plan. That’s given a new lease of life to the 1970s Tegel beloved by passengers for its short distances as much as it is ridiculed for a lack of shopping.

Story: Airline Hub Loss Stalks the Heartland: Who’s Next After Cleveland?

“Tegel provides total clarity, the entire airport is comprehensible at first sight,” said Meinhard von Gerkan, 79, the architect who designed the building four decades ago and also planned Berlin’s new Willy-Brandt terminus, now due to open after 2015. “Transfer times are reduced due to the round setup. But that’s a contradiction to the idea of having passengers take the longest possible route to channel them past perfume bottles and t-shirts.”

Bygone Era

Tegel is a relic of the Cold-War era, when Berlin was a tiny island in a communist ocean and Frankfurt the country’s undisputed gateway to the world. First designed to handle 2.7 million passengers, that number jumped to 19.6 million last year. While still a fraction of the 58 million served at Frankfurt, Berlin’s status as a prime tourist attraction has steadily fed Tegel beyond its most optimistic capacity.

Berlin had a record 26 million overnight guests last year, its tourism office said, making it Europe’s No. 3 city destination. Tegel’s passenger total ranked 24th for Europe as a whole and fourth in Germany after Frankfurt, Munich and Dusseldorf. Berlin Schoenefeld, which will be subsumed by the new airport, saw a 7.3 percent contraction to 6.58 million.


Shift in German housing demand may support affordability

The relative contribution of Germany’s largest cities to residential property price growth has fallen in the last two years compared with the country’s middle-sized and smaller urban areas, Fitch Ratings says. Slowing growth in metropolitan areas that have seen the sharpest price increases in recent years may help keep overall affordability levels stable and supports our view that the German property market is not overheating.

Mean growth in residential property prices for apartments in 125 German cities last year was around 6.3%, slightly lower than 2011’s peak figure of 6.9%, according to data from research and consulting firm BulwienGesa. This reflects a deceleration in Germany’s 14 largest metropolitan areas (populations above 500,000), even while there was a moderate increase in middle-sized (100,000-500,000) and smaller (below 100,000) urban areas.

Our analysis shows that last year’s relatively even growth across the country was in sharp contrast to 2011, when the largest metropolitan areas such as Berlin, Hamburg and Munich posted an average price rise of nearly 10%. In 2013, the figure had dropped to 6.7%. By contrast, average annual growth rates in mid-sized and smaller towns and cities rose in the same period, to 5.9% from less than 5% (mid-size) and to 6.3%, from below 4% (smaller).

Our analysis of the BulwienGesa data is in line with the February Bundesbank report, which also showed residential property price growth in German metropolitan regions had slowed. The Bundesbank argued that a shift in demand to more regional areas explained most of the slowdown in metropolitan growth. It has previously noted the tendency of price rises in towns and cities to spill-over into neighbouring regions.

As we noted in our “Global Housing and Mortgage Market Outlook” in January, price rises have clearly outpaced income growth in some German metropolitan areas, and a rally at the same rate for another two years would increase the risk of price declines. Growth in smaller cities is catching up, but has been moderate and follows a long period of price stagnation to 2009. In contrast to some global metropolitan areas such as London, price-to-income ratios in most German cities remain moderate. Affordability in Germany as a whole is strong and we think will be stable in 2014 as house prices and incomes increase in tandem and mortgage rates remain low.

A shift in demand away from the biggest metropolitan centres that have seen the largest price increases may suggest that buyers are willing and able to look elsewhere. The interconnectedness and relative proximity of German cities should make this possible. If so, this may ease nascent affordability pressures in those cities that have seen strong growth.


You Can Buy Berlin’s Creepiest Abandoned Amusement Park on eBay

The chance to live in a land of childhood nightmares only comes around once in a lifetime. Spreepark, an amusement park in Berlin that’s been closed for over a decade, could now be yours. The property was recently listed on eBay for a cool 1.62 million Euros.

Built by the Communist East German government in 1969, Spreepark was originally known as Kulturpark Planterwald, named for its southeast Berlin neighborhood. At the time, it was the only permanent amusement park in both East and West Germany and featured a towering ferris wheel that dominated the skyline.

You Can Buy Berlin's Creepiest Abandoned Amusement Park on eBay

You Can Buy Berlin's Creepiest Abandoned Amusement Park on eBay

After reunification, a man named Norbert Witte began managing the park, sprucing the place up and renaming it Spreepark. He also added his own, um, diversions, according to Atlas Obscura:

During the time Witte controlled the park, he changed the scenery multiple times, even adding an English village and water landscape. Unbeknownst to police and Berliners, Witte had also become involved in cocaine smuggling in pieces of ride equipment between Peru and Germany during his time as park administrator.

Witte was eventually caught and tried on drug smuggling charges, and the park has been closed since 2002. After that, he tried-unsuccessfully-to open an amusement park in Lima (CocaineWorld?), and now apparently lives on the property in a trailer.

You Can Buy Berlin's Creepiest Abandoned Amusement Park on eBay

You Can Buy Berlin's Creepiest Abandoned Amusement Park on eBay

Even though the park was closed, it’s apparently pretty easy to jump the fence, which explains the treasure troves of ruin porn depicting the park that you’ll find online. Limited official tours have also been offered over the last few years, and now the park’s train even runs occasionally through the overgrown complex.

The property was for sale last year, even receiving a bid from a concert promoter, but the sale was withdrawn due to a stipulation that the land must remain as an amusement park until 2061.

You Can Buy Berlin's Creepiest Abandoned Amusement Park on eBay

You Can Buy Berlin's Creepiest Abandoned Amusement Park on eBay

What would it take to bring Spreepark back to life? Will some enterprising young team take it back to its family-friendly roots, or keep it as-is and make millions renting it out to the producers of Saw XXIV? I can’t imagine the costs of bringing all these rides back up to code, but the arcade seems like it’s in pretty good shape. [eBay via @andberlinblog]

Original Article:

Berlin Real Estate Developers Are Hot for the Historic Center

Well-stocked snack bars and tricked-out rec rooms have become standard features of startup offices. But how many techies can say they’ve got the remains of a Nazi bunker in the courtyard? Or that their windows were once lookouts for East German border guards?

Music-sharing startup SoundCloud and Mozilla, maker of the Firefox Internet browser, are among the companies that have signed leases for space in a building that once formed part of the Berlin Wall. The former brewery is one of several properties on Bernauer Strasse that investor Simon Schaefer is turning into a technology hub known as the Factory . “It’s a cool way to build on history,” says Schaefer, who was 12 when the wall fell in 1989. “You see the East German architecture, you see the 19th century neighborhood, and then you have something modern we’ve put on top. That’s the essence of Berlin.”

Schaefer belongs to a second generation of developers seeking to profit from the last remaining war ruins and abandoned lots in Berlin’s central Mitte district. Renovation of the complex, erected in 1890 by the Oswald brewing company, is set to wrap up by the end of the year.

Elsewhere in Mitte, investors are bidding for the dilapidated Tacheles building, a former department store occupied by squatters for more than two decades. A vacant post office is set to become a luxury apartment complex. “In Berlin, there are a lot of properties that are not finding much use, but in Mitte there aren’t many left,” says Alexander Kropf, a broker at Jones Lang LaSalle in Berlin. “The Factory came at the right time.”

The former brewery features four stories of yellow brick and oversize windows topped with two floors of modern glass and steel. In the yard, rubble marks the location of a Nazi bunker destroyed by the Soviets. The Berlin Wall Memorial is just down the street. “There are layers of history in the city, and you feel it every day,” says SoundCloud co-founder Eric Wahlforss.

On the night of Aug. 13, 1961, soldiers strung barbed wire through the heart of the middle-class neighborhood as they partitioned the city. In the weeks that followed, many people escaped to the West by jumping from windows of homes along the street, until East German soldiers evicted all residents, barred the doors, and bricked up the windows. The Factory is part of the “second wall” that stood behind the primary barrier facing the West. The area between the two was dubbed the “death strip,” because civilians who ventured there were liable to be shot.

This type of real estate rehabilitation isn’t unusual in Berlin. Germany’s biggest shopping mall will open this spring on the site of Wertheim, a department store owned by a Jewish family and taken over by the Nazis. The Berlin outpost of Soho House, the operator of clubs and hotels, was once the East German Communist Party’s headquarters. “There’s a need to deal with the history,” Schaefer says. “And one of the most positive ways to deal with it is to create something positive and tolerant and forward-looking.”

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Bundesbank sees muted impact from emerging market turmoil

The turbulence experienced in emerging markets early this year is insufficient to derail a recovery in the global economy, which could strengthen during 2014, the Bundesbank said on Monday.

Currencies in Turkey, South Africa, Hungary and Russia suffered major sell-offs over the past month before recovering slightly after central banks fought back via interest rates hikes or exchange rate interventions.

In its February monthly report, the Bundesbank said China appeared poised to continue growing without much disruption but noted that central banks in some emerging economies had hiked rates in response to capital outflows and currency falls.

“Even if this should slow the economic growth of the countries concerned, their low global weight means it is not to be expected that the recovery of the world economy will be appreciably affected,” the German central bank added.

In Germany, the underlying momentum of the economy should have “increased appreciably” in the final quarter of 2013 and the first quarter of 2014, it said, noting the “almost continual improvement” in companies’ and households’ assessment of the situation.

“However, this should only fully show up in the GDP growth rates at the turn of the year, when the increased order inflow translates into production,” the Bundesbank added.

The German economy grew by 0.4 percent in the final quarter of last year.

“In the euro zone, if burdens from the debt crisis still exist, the signs are increasing for a gradual economic recovery,” the bank said.

The Bundesbank noted that increased risk aversion in financial markets led early this year to a fall in share prices and a flight into liquid government bonds, adding:

“Nevertheless, the valuation level of shares on both sides of the Atlantic is still relatively high.”

Most Germans don’t buy their homes, they rent. Here’s why

It’s just a fact. Many Germans can’t be bothered to buy a house.

The country’s homeownership rate ranks among the lowest in the developed world, and nearly dead last in Europe, though the Swiss rent even more. Here are comparative data from 2004, the last time the OECD updated its numbers. (Fresh comparisons are tough to find, as some countries only publish homeownership rates every few years or so.)


And though those data are old, we know Germany’s homeownership rate remains quite low. It was 43% in 2013.

This may seem strange. Isn’t home ownership a crucial cog to any healthy economy? Well, as Germany shows—and Gershwin wrote—it ain’t necessarily so.

In Spain, around 80% of people live in owner-occupied housing. (Yay!) But unemployment is nearly 27%, thanks to the burst of a giant housing bubble. (Ooof.)

Only 43% own their home in Germany, where unemployment is 5.2%

Of course, none of this actually explains why Germans tend to rent so much. Turns out, Germany’s rental-heavy real-estate market goes all the way back to a bit of extremely unpleasant business in the late 1930s and 1940s.

(Read full article here –

German property market not overheated

German housing markets continue to show improvement with values up by 3% year on year in 2013 compared to 4.5% in the previous year, according to a new analysis.

While price increases are quite high in some metropolitan areas and are clearly outpacing income growth, the German property market is not considered to be overheated, says the analysis from Fitch Ratings.

It says that this view is supported by the positive economic conditions and the long lasting stagnation of house prices until 2009.

The report also says that the main driver of German house prices are low rates and encouraging demand for property investment that is outpacing muted construction activity.

In addition, concerns over inflation and flight to tangible assets triggered by the euro crisis are also driving property prices. But the economic environment and ongoing strong demand are expected to moderately increase house prices in the medium term.

‘Fitch expects house price increases to continue for the foreseeable future as macroeconomic factors remain favourable,’ the report says, adding that with Germany’s unemployment rate at its lowest level since reunification and the power of trade unions growing, disposable income has increased. Combined with favourable financing conditions this has resulted in average German debt to income ratio decreasing since 2009 following years of stagnation.

However, Fitch expects the affordability to remain stable for 2014 as house prices and incomes are likely to increase in tandem.

At the same time interest rates are at a historical low, which favours the acquisition of properties and Fitch believes German mortgage rates will remain low in 2014, but will pick up gradually in line with the long term risk free rate.

A robust mortgage sector performance is expected in 2014 and since 2009 the average yearly increase in new mortgage lending has been 7%. Fitch says that the increase is not surprising and reflects the increased demand for properties. Lending volumes are expected to continue to increase moderately driven by favourable market conditions.

‘The relatively strong affordability may slightly increase prepayments on existing loans, although upside is limited given idiosyncrasies of the German mortgage market,’ it adds.


Unaffordable cities: Berlin the renters’ haven hit by green fog of eco-scams

Kopenhagener Strasse is a quiet street in the Prenzlauer Berg district, just a few metres east of where the wall used to run. Most of the tenement houses that flank the cobbled street here were built during Berlin’s big push for industrialisation in the late 19th century, as a counter-statement to the social segregation that Friedrich Engels had reported from Manchester: let’s bring white and blue collar workers under one roof – that was the intention, at least.

These days, the houses on Kopenhagener Strasse are still not too far from meeting that ideal. At No 46, the front house is occupied by students and media professionals. In the set-back building that curves around the communal yard, a nurse and her family live on the same floor as pensioners and artists. Rent is still relatively low: one couple, who have lived here since 1962, are rumoured to pay €100 (£83) a month.

But recently things have changed at No 46. A year ago, the apartment block was bought by Wulf Christmann, an investor who already owns a number of properties around Berlin. Four months later, a letter arrived: urgent renovations including a new central gas heater, triple glazing and upgraded insulation were announced – the kind of green measures the German government is keen to promote, and which local councils thus tend to wave through without hesitation. The catch was hidden at the back of the document: charges amounting to a permanent rent increase of more than 300%.

Ottmar Mayer, a 73-year-old pensioner who lived in the rear building, used to pay around €370 a month for his three-bedroom flat – now he was suddenly looking at over €1,200. “Well people, shouldn’t we just accept this very humane offer and finally live in a luxury home like normal people?”, he wrote on the apartment block’s own blog in September. His sarcasm may have masked a genuine anxiety. A month after writing his blogpost, Mayer died from the result of a long-running heart problem. Neighbours say he had been having trouble sleeping. (READ MORE)

Germany ‘normalizes’ as house prices rise

Long considered the land of renters, Germany is normalizing and people are increasingly buying their own homes, a new study suggests. This is pushing up prices, with rises of up to five percent expected this year alone.

Cheap loans and rising incomes are the two main drivers of the trend for Germans to increasingly buy rather than rent their homes, suggests the study by Regensburg University’s Institute for Property Economy.

The authors of “German domestic property as capital investment”, published on Monday, said that although the market showed some symptoms of a boom, there was no danger of a bubble bursting.

Anticipated price increases would simply make the German market more normal, said Jochen Möbert, property expert at Deutsche Bank, which commissioned the study.

“In the current year, the price of one-family houses could rise by an average of three percent, and that of new-build flats by five percent,” he said. Not only the low interest rates charged on loans for property purchase, but also the continuing demand were responsible, he said.

But other considerations were also playing a role, suggested Tobias Just from Regensburg University. He said that demographic, general economic and financial reasons had contributed to an underlying annual three percent price rise in house and flat prices across Germany.

Strong immigration to Germany, continuing urbanization and a clear increase in employment rates had also been factors in demand pushing up prices, he said, also mentioning the insecure situation for many on the finance markets as a prompt for a flight of capital to property.

Möbert said the typical symptoms of a property bubble such as an over-generous credit system, an overheating of the economy or a clash of price and rent rates were not to be seen.

The real credit growth in Germany is continuing very moderately,” he said. “We are far away from a price dynamic like in southern Europe or the USA before the financial crisis.”