Property Sale Trends In Europe

Like the property markets around the world, the European property markets also have their own pockets of high and sluggish growth. Given below is a brief study of five most popular markets of growth in the region which is preferred by local and international real estate investors since the situation started to improve a couple of years ago.


This picturesque island off the southern coast of Italy is well populated due to its tourism and business sector. Since 2013 it has received a significant influx of capital from international buyers who have invested in expensive properties in Malta which have appreciated at a rapid pace. Between 2010 – 13 prices of properties in their housing sector fell rapidly around 40 percent due to the financial crisis, though earlier they had been growing by 10-15 percent Y-O-Y. The purchases in general were made by European investors and followed by buyers from United States and Africa.


This second largest city of Romania has witnessed a construction boom with new residential units appearing in 2014. As per the latest records, the number of property transactions has grown by 8 percent in the early part of 2014 when compared to 2013 when demand was still sluggish. During the economic boom period of 2007, the number of residential units grew by 800 – 900 units every year, but during the first quarter of 2014 this same market grew by 1500 units. The majority of foreign investors are from Spain, Hungary, Germany, China and UK while Americans make 1 percent of the total investment.


Even though Spain was the worst affected nation by the financial crisis in 2008, it has emerged as the fastest growing property market in Europe. Stability has been achieved by the housing sector which had been falling between 2007 and 2013. Prime properties in Barcelona are selling at a rapid pace of 14 percent since early 2014 leading to a simultaneous rise in property prices and sales. Investment in Barcelona’s market has been made largely by British and French investors followed by financiers from Switzerland, Germany and Belgium.


This historical capital city of Italy is finally showing signs of growth with sale of nearly 6579 properties since the early part of 2014. Housing prices which have been falling for the past seven years are now growing by 0.6 percent. Investment in old and new properties around Rome is being largely carried out by Russian conglomerates followed by small real estate developers from Germany, France, UK and China.


The capital city of Germany is always favoured by property investors as they are able to resell their purchases within 6-8 months. However there is a significant scarcity of supply in the city centre area which falls 2 percent below demand. As per industry estimates there is a requirement of 11000 residential units on an annual basis, but the actual construction is limited to just 6500 units on average. This has led to an increase in rentals, followed by increases of 15 percent of first time buyers. Russia is the biggest investor in the German property market followed by Italy, Greece and France.

The ‘EasyJet Set’ lands in Berlin’s tech scene

Spanish and Italian immigrants are helping to shape Berlin’s burgeoning tech scene.

Take a walk through Kreuzberg and Neukölln, two of Berlin’s trendiest neighborhoods, and you’ll notice the shush of Iberian Spanish emanating from cafes, bars, and circles of friends swilling drinks on canal bridges. What you hear may be a potent force in the future of Germany’s tech scene.

In recent years Berliners have become accustomed to the “EasyJet Set,” an epithet Germans use to describe backpackers who arrive in droves on low-cost airlines each weekend. Yet as unemployment soars at home, these travelers — many skilled workers from Italy and Spain — have decided to stick around. Unhappy with working conditions at home and lured by the appeal of a party capital, these techies see Berlin as a mecca for jobs, particularly in startups.

27-year-old Lucia Payo Molina moved to Berlin from Leganés, a city near Madrid, almost two years ago. She and her boyfriend Pablo, who is also from Spain, work as developers at the IT company Futurice.

Payo says jobs for developers in Spain are worse in terms of salary and work environment.

“When I went to a career fair at my university, the job offers I got for Germany paid 40,000 to 45,000 euro,” she says. “In Spain it was between 18,000 and 25,000 euro for the same kind of work.”

Payo says companies in Spain also pressure employees to work longer hours unpaid. “They tell you if you don’t do it there are five other people waiting for your job who will.”

29-year-old Giuseppe Colucci describes a similar situation in Italy, saying many of his friends work as freelancers, unpaid interns, or on temporary contracts. He came to Berlin over three years ago and recently accepted a job as an account manager at Greatcontent, a platform for connecting writers and companies who need text.

Employment numbers in Italy paint a grim picture. 12.3% of the population is unemployed and that statistic balloons to 43.7% when you focus on people under the age of 25, according to the EU statistics agency Eurostat. The situation is worse in Spain, where 24.5% of the overall population and a staggering 53.3% of youth are unemployed.

London and Berlin are known among programmers as the top European cities for startups. But compared to the sky-high prices of London, Berlin is dirt cheap. Spanish and Italian immigrants don’t necessarily arrive with job offers, but the cost of living is low enough that many can afford to stay until they find employment. Some take service-industry jobs in the meantime. Because all of these countries are part of the European Union, their citizens can work freely in any country without having to worry about the right visa or other immigration hurdles.

For many immigrants choosing between the U.K. and Germany, Berlin’s reputation as an adult playground also tips the scale in its favor.

28-year-old Pablo Villalba founded 8Fit, a mobile app for fitness and nutrition, and moved to Berlin from Barcelona in May. He agrees it’s cheaper to run a company in Berlin, but says he’s here for the lifestyle.

“I love Berlin. There are a lot of international people, it’s 24-hours.”

Yet the feeling isn’t entirely mutual, as many Germans object to neighborhood changes as immigrants arrive. 30-year-old Javier Rincon, who founded the Berlin-based service agency Proudsugar, says Germans’ original perception of the Spanish community “wasn’t so positive.”

Nonetheless, some businesses are cashing in. Tapas bars offer a taste of home, Italian- and Spanish-language news outlets target readers in their native language, and posters in Spanish advertise German courses. The Goethe Institut, an upmarket language school with branches all over the world, says they’ve seen an uptick in enrollment by Spanish and Italian students in Berlin over the past few years.

In Spain, the flight of young people has caused a drop in the country’s overall population in the past few years. Data from Spain’s official statistics institute shows over 79,000 Spanish citizens emigrated in 2013- an increase of 38.5% from the previous year. The most concentrated group to leave were young people in the 20-49 age range. The number of Spanish citizens registered as residents in Germany increased from 105,526 in 2008 to 135,539 in 2013, according to the German Federal Statistical Office. The Spanish embassy in Berlin said the true number could be higher, as many people do not register their residency. The embassy noted it has witnessed an increase in Spanish citizens in the city in recent years.

Many Spaniards in Berlin’s tech industry say those numbers reflect brain drain from their country.

“Going to work abroad should be a personal choice, not something you’re pushed to do,” Payo says. “Right now it’s more of the latter.”

Colucci agrees some people come to Berlin for the experience, but says the financial situation in Italy is the primary motivation. “The majority are moving because they’re kind of desperate,” he says.

Rincon hopes the entrepreneurial successes of expats in Berlin will change perceptions of the immigrants in Germany and also teach people back in Spain to look beyond the existing system for their careers.

“It’s good that hardworking people show we’re adding value,” he says.

Payo sums up the reputation that has drawn so many of her countrymen to Germany. “Berlin is one of the cheapest cities in Europe. It’s big, it’s young. You can get a job in a startup which is more fun than a big company because you’re closer to the business and closer to the people.”

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Berlin’s realty preferences creates opportunity

Germany has been seen as the ‘safe haven’ of the Eurozone for some time now, with its GDP five times bigger than the rest last year.

Taking a closer look into the country’s property markets, Berlin really stands out as the key destination when considering where to invest in residential property. The city has a very strong employment sector boasting the highest job growth of any German state over the last two years. Its diverse, dynamic and modern economy is fuelled by sectors such as technology, pharmaceuticals, renewable energy and biochemical engineering, and each with a skilled workforce. This is helping attract professionals and families from all nations.

Over 200 nationalities work and live there, highlighting just how welcoming and liveable the city is for all nationalities. Tourism numbers are also increasing year-on-year with 150 million visitors last year.

Berlin is very much a continental hub for both air and rail. Brandenburg Airport is currently going through a huge expansion to meet the ever-growing demand of business and recreational travellers. Once completed (estimated by 2016), the airport will cover 1,470 hectares, which is equivalent to the size of 2,000 football pitches.

When the new airport goes into operation it will be equipped to handle 25 million passengers a year and. Due to the ever-increasing demand, its design can accommodates further expansion plans to accommodate up to 45 million passengers a year, making this one of the largest airports in Europe.

The scale of this project alone shows just how busy Berlin is becoming. It’s worth noting that no country invests into such facilities unless there is an imminent need.

Berlin is also home to renowned universities such as the Humboldt, which have thousands of students enrolling from overseas. The top three universities combined have over 100,000 students enrolled on permanent placements.

Like any location around the world where there are strong fundamentals, a transparent legal structure and a strong economy, investors are attracted. With dropping unemployment levels, a growing population and strong GDP numbers (not to mention very low interest rates), Berlin offers fantastic value in residential property and attracting savvy investors from all corners.

Berlin offers extremely strong yields as many people prefer to rent over buying their family home. Over half of the population living and working in the city rent their property, which is great news for buy-to-let investors.

Property prices increased 9 per cent in 2013 over the previous year with yields averaging above 6 per cent. The strong yield in Berlin is really underpinned by a shortage of housing, with a reported shortfall of 5,400 units at the start of 2014.

I always advise to invest into locations within strong markets that offer a safer play. Personally, I prefer to invest in pockets of value in and around the Central Business District (CBD) as you are likely to have your property tenanted from day one to a professional in a good job.

With a very low average property price, high yields and low interest rates, Berlin will be a strong addition to any property investment portfolio.

Why Germany risks a property bubble

HEAR the words “London property”, and “bubble” is rarely far behind. House prices in the capital rose by 20 per cent in the year to May – although last week’s Rics indicator showed that the market is now pausing for breath, as it responds to warnings over tougher mortgage standards and the expectation of higher interest rates.

But London isn’t the only place that has experienced dizzying price rises. Major German cities like Frankfurt, Munich, and Stuttgart are becoming increasingly attractive places to live, as immigrants and rural Germans flock to them. And an equally potent driver is the good old search for yield.

Plurimi Investment Managers’ Patrick Armstrong argues that near zero interest rates in the Eurozone make sense for the region, but not for Germany. “The economy has been relatively strong and the interest rate policy is disjointed from economic reality. With 10-year bund yields at 1 per cent, money will have to flow towards property at some point.” Deutsche Annington chief executive Rolf Buch agrees, saying the German housing market is in a “sweet spot” due to stable incomes and low interest rates.

According to B+D, the most expensive properties in Germany are in Munich (at an average of €4,800 per square metre). Berlin is relatively cheap (a square metre there costs just €2,930). Compare that with an average square metre price of £8,900 (around €11,120) in Westminster, and you’ll think Germany is a bargain. But Berlin is experiencing the highest growth in values. Prices of flats in the trendiest part of the German capital have risen by 40 per cent since 2007.

Just as the Bank of England has sounded the alarm over London’s market, the Bundesbank recently voiced concern over the health of German property, saying that “there is an increasing risk of a housing bubble”. Like in the UK, prices have shown signs of moderating, but analysts agree that the environment is still favourable for price and rent rises.

How do you participate in German property? One of Armstrong’s preferred stocks is Deutsche Annington, which he says is trading at a small discount. He also likes Grand City Properties, which focuses on turning around distressed portfolios. Analysts at Goldman Sachs, meanwhile, expect LEG, Germany’s second biggest property company, to continue to show “good like-for-like rental growth from an acceleration in rent per square metre growth over the next few quarters”.

Yet with all this money being attracted, are rental yields starting to fall? Buch sees no signs of this yet, though it “could be on the horizon”. For now, however, he says an improvement in capital value and residential yield is still possible for the next year. This is why his firm raised guidance for 2014.

Carolin Roth is anchor for CNBC’s Capital Connection.

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Berlin: a city in a state of nervous flux

Some Berliners worry the city’s free spirit – and affordable rents – are being eroded by property speculation

A quarter of a century after toppling its dividing wall, Berlin is growing together and growing up. Now on its sixth iteration in a century, the German capital remains in a state of nervous flux. After imperial, Weimar, Third Reich and two Cold War Berlins, today’s united city is a self-governing city-state in Germany’s 16-state federal structure and, since 1999, the seat of the federal government. At 892sq km it’s slightly smaller than the greater Dublin region, with a population of 3.4 million, growing to 4.5 million in the metropolitan area.

Decades off the grid made Berlin the capital that capitalism forgot. These days, however, it is so popular with tourists, hipsters and investors, that locals worry the city they loved is vanishing before their eyes.

I live in the western neighbourhood of Wilmersdorf, south of the leafy Kurfürstendamm that is western Berlin’s main thoroughfare. Like Charlottenburg to the north, Wilmersdorf was built later than the eastern city centre, mostly after German unification in 1871. The streets here were home – and playground – for the city’s new professional, creative class, including many secular Jews.

Albert Einstein lived here in the decades before E came to equal mc2. Around the corner from him lived Anita Berber, the Weimar-era performance artist notorious for her drug-induced naked dance routines.

The area’s buildings range from stuccoed Jugendstil apartments to bombastic Nazi-era blocks and, where I live, Bauhaus apartments built around green, block-sized courtyards.

Like most Berlin neighbourhoods, Wilmersdorf offers a self-contained residential-commercial mix. There is no shortage of money – or Russians – living here, judging by the proliferation of badly-parked Porsches and the fur-caviar concentration at the weekend markets. There are five train lines, half a dozen buses, and the Autobahn lies at the district’s outer perimeter for quick exits. There are good facilities for families, too: larger apartments, good schools, roomy playgrounds and parks, not to mention the Grunewald forest and lakes to the west.

While life in the German capital is far less stressful than London, Paris or even Dublin, there is definitely a charge in the air that wasn’t here before. But it’s hard to know when the switch was flicked.

Some say it was the 2006 World Cup that put Berlin back on the map it had slipped off decades earlier. Others say the adrenalin shot came during the euro crisis as investors – German and foreign – sought a safe haven for their capital. They moved in en masse and, from an admittedly low base, the Berlin residential property market has taken off. Irish investors were among those who moved in during the past decade. Some made a packet, others lost their shirt and departed with a bad reputation for flipping buildings for profit and to hell with the tenants.

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Berlin pensioners take on Swedish property giant

Residents at a former Berlin retirement home are furious with Swedish property developer Akelius over increased rents and poor living conditions. And the pensioners aren’t ready to budge.

Some came with canes, some with walkers, but they all came ready for a fight, reported The Local Germany from the scene.

Elderly residents living near the Spree river were gathering at a tenant meeting to figure out their next move against the Swedish juggernaut Akelius, which plans to renovate the building and surrounding property, while increasing rent by 40 to 65 percent.

The clash has gained public attention through an online campaign after Akelius announced the rent increases last April. It also proposed major construction, renovation and retrofits to the building and backyard.

After a media storm in Germany, Akelius offered to reduce the rents, but the pensioners were unimpressed.

“On the face of it they gave us a spoonful of sugar, but if we turn around, they kick us,” one of the pensioners told The Local. “It’s not an honest offer.”

“Most of us are over 80. If you give us 5 or 10 more years, we can live our last years in peace.”

The pensioners have now gathered over 50,000 signatures in a petition to fight for their rights, hoping power in numbers will help in negotiating with the Swedish company.

Read the full story  via The Local Germany