German Residential Property Prices Rise Most in a Decade

German home prices rose at the fastest rate in at least 10 years in the third quarter as investors bought apartment buildings at a time when low interest rates make other investments less attractive.

Values climbed 5.2 percent from a year earlier, with multifamily houses gaining 7.2 percent, according to an index published today by the VDP Association of German Pfandbrief Banks. Prices for owner-occupied condominiums gained 2.6 percent as momentum in that market slowed following bigger gains in the previous three years.

Apartment buildings “continue to be sought after by institutional and private investors alike,” said Jens Tolckmitt, VDP’s chief executive officer. “The very low interest rate and the resulting search for attractive yields on investment support this trend.”

Investors are drawn to Germany’s reliable rental income and potential for further property-price gains at a time when fixed-income markets offer low yields. Low interest rates also make it cheap for buyers to take out mortgages.

Rents on new leases in apartment buildings rose 4.6 percent in the third quarter from a year earlier, VDP said.

Stocks Records

Listed residential landlords, such as Deutsche Annington Immobilien SE and Deutsche Wohnen AG, have benefited as shareholders bought the most property stocks ever this year, according to data compiled by research firm Barkow Consulting GmbH. German property companies have sold a record 4.1 billion euros ($5.1 billion) of shares this year, 15 percent more than in all of 2013, the firm said.

The FTSE EPRA/Nareit index of German property stocks has climbed about 25 percent this year, compared with a decline of about 3.5 percent on the benchmark DAX Index. (DAX) Deutsche Annington, Germany’s biggest listed landlord, has gained 39 percent this year in Frankfurt trading.

Investors seeking stable returns are also buying office properties. Office values climbed by 3.7 percent in the third quarter, while office rents rose 1.8 percent, according to VDP. Commercial properties are attracting professional investors with large cash reserves, including pension funds and sovereign-wealth funds.

Buyers acquired 25.5 billion euros of commercial properties in Germany in the first nine months, the most since 2007, according to Jones Lang LaSalle Inc. (JLL)

VDP collects price data from mortgage contracts signed across Germany by more than 30 member banks, which include Deutsche Bank AG, Commerzbank AG, Banco Santander SA (SAN) and ING Groep NV. (INGA)

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Berlin named most ‘fun’ city in the world

Berlin has pipped London to the title of “most fun” city in a poll of travellers.

The German capital was among 1,800 cities ranked according to categories such as “bars”, “clubs”, “shopping”, “adult entertainment” and “activities”. Factors such as the average price of a beer, and whether or not public drinking is permitted, were also taken into account.

While it did not finish top in any major categories – London’s clubs and concerts, Tokyo’s bars and shops, and New York’s activities were voted the world’s best – it did enough across each area to warrant the number one spot. Berlin’s beer was also the cheapest of the top 25 cities.

The survey was commissioned by GetYourGuide – a travel review website – and GoEuro – a booking agent. It was based on an analysis of data on various websites around the world, such as TripAdvisor and Yelp, and a poll of almost 2,000 travellers.

Paris rounded out the top three; eight of the top 10 cities are European, while some of the more surprising cities to feature in the top 25 included Dubai, New Delhi, Macao and Moscow.

Rio reached just 18th on the list, and Bangkok only 22nd. See the rankings in full here.

There may also be accusations of bias – GoEuro is based in Berlin, after all.

Telegraph Travel’s Adrian Bridge, a former foreign correspondent who was in Berlin when the wall fell just over 25 years ago, recently described it as “possibly the coolest place on the planet” following a recent revisit.

“There are many journeys through Berlin,” he wrote. “There is the Berlin of great culture, of grand opera houses and masterful orchestral manoeuvres; the Berlin of artistic genius and the treasures of antiquity captured in the bust of a still fresh-faced Queen Nefertiti.

“There is the Berlin of a thousand nightclubs and myriad alcohol and drug-fuelled voyages of self-discovery into the dawn; the Berlin of cutting-edge fashion; of grand monuments and sweeping boulevards and fur-coated (frequently Russian) ladies.”

Paul Sullivan, our Berlin expert, said: “Berlin’s nightlife is justly world-renowned thanks to unpretentious dress codes, an inherently low-key/low-hype culture (many clubs are hidden away and don’t allow photography of any kind) – and a propensity to stay open until the last person is more or less stretchered out.

“From slick spots like Watergate and Weekend to industrial behemoths like Berghain and Stattbad Wedding, the party never seems to end here – and the beers and eventual taxi home won’t break your wallet either.”

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German Residential: Price cap will not halt demand for houses

What does Germany’s new housing policy mean for the market. Klaus Niewöhner-Pape considers the implications of Mietpreisbremse

Renting and the housing market has been a hot topic in Germany for the past two years and was also one of the key issues in last year’s electoral campaign.

Is housing becoming unaffordable? Is city living now only for the rich? Questions like these can be found in the headlines of newspaper reports and talk shows. This has had a real effect on the industry; both the federal and state governments have introduced laws whereby rent increases that are deemed inappropriate will be prohibited.

Before addressing the pros and cons of greater regulation of the housing market and its effects on the markets, the current market situation should be assessed. Indeed, the rents of apartments in many German cities have risen recently. In Berlin, new building rentals experienced growth of 8% compared with the previous year; in other large cities the situation is similar. Although the top rents in Germany’s cities are moderate compared with London or Paris, the increases are causing concern in Germany. (read more here)

German estate agents vote against strike action

A widely-ridiculed attempt by the German Federation of Estate Agents (BVFI) to start a nationwide strike on 7 November has failed to gain enough support following a vote of its members.

The ballot was called in protest at a new property law to start in 2015 that will cap rents and prevent the association’s 11,000 members from earning commissions on rental property.

“The trend is towards a strike”, said Helge Norbert Ziegler, president of the BVFI, halfway through the voting procedure last week, but the full results published yesterday showed that of the 3,707 members who voted, 30% voted for strike action and 6% voted against. However, the idea was killed off by the 64% abstentions, most of them agents not in the rental business and hence unlikely to lose out from the new law.

Zeigler had said that agents were angry at “being held responsible for everything that goes wrong in the housing market.” However, given that anti-agent feeling, it was perhaps unsurprising that the ballot led to estate agents becoming even more the butt of German jokes, along the lines of ‘why can’t they go on strike permanently?’ with the hashtag #maklerstreik (estate agent strike) trending on Twitter, and not predominantly in support. Also distancing themselves from the strike call were the rival Real Estate Association (IVD), whose chairman said: “The call to strike is a nonsense… this harms the reputable brokers.” Another said: ”It’s a stupid idea. I’m sure politicians are trembling in their boots over the economy collapsing because of an estate agent strike.”

Even the IVD admits that it could be a serious problem for many agents in Germany however. In Germany nearly 850,000 rental properties are re-let each year with the help of a broker, around 40% of lease renewals, and around double that, 80%, in tight markets such as Berlin, according to tagesspiegel. The new tenant then pays the agent a commission of 2% plus VAT. From next year the tenant will pay the landlord, who will either pay the broker or may take on the whole process themselves. “The industry is changing profoundly and permanently,” said the Chief Analyst at Immobilienscout24, Germany’s largest property portal.

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20 cool places to stay in Berlin

Best for first timers

1. The Circus Hotel
In a great location on Rosenthaler Platz, an up-and-coming residential neighbourhood, Circus is one of the best hostel/hotel hybrids in Berlin and offers everything from dorm rooms to penthouse studio apartments with a kitchen and balcony. It’s ideal for first-timers to the city: there are free walking tours, bikes and Segways for hire, German lessons, cocktail-making sessions, movie nights in its lounge — and hugely helpful staff.
Details: A bed in a dorm starts at about £15 per night, apartments sleeping two start at £72 per night (

(Read More)