Germany’s property market should brace itself for a surge in international investment according to a new study.
Global build-asset consultancy EC Harris’ “German Real Estate Market Trends: The Investor Perspective” report found that 70% of investors were planning to increase their level of investment this year.
59% of investors were also confident that Germany would remain Europe’s most stable economy over the next few years.
The report, which compiled data from several focus interviews with national and international investors, also found a preference for projects in Frankfurt and Munich, with 65% of respondents showing a willingness to invest in the cities. (more)
The FINANCIAL — After a weak winter half-year, the German economy will already be back to a solid growth path in the spring. Although GDP growth in the final quarter of 2011 was negative with -0.2% for the first time in two years, already in the first quarter of 2012 GDP will return to – an initially slight – growth of 0.2%
According to KfW, there after GDP will enter a stronger upwards trend: KfW expects economic growth of 1.2% for the overall year 2012. In its first forecast for 2013 it expects an increase in growth of 1.9%.(more)
Germans are practically euphoric these days—compared to the dour mood that prevailed for nearly two decades following reunification, when real wages declined in a stagnating economy beset with what appeared to be permanently high unemployment.
While discontent smolders in other Eurozone countries, 88% of Germans are satisfied with their standard of living (Gallup). And 85%—a record since the beginning of the surveys—believe that they can get ahead if they work hard, up from 71% in 2007.
CBRE Germany reported this week that transaction volumes in “German residential property portfolios of more than 50 units increased by 44 per cent year-on-year to €6.12 billion (USD $8 billion) in 2011.”
“The number of traded residential units also increased by 27 per cent to around 92,000 units within 194 transactions, indicating that the market for large portfolios of over 1,000 units has regained momentum,” the global agency told OPP this week.
Where were the hotspots? “The demand for residential units in Berlin was particularly strong,” says CBRE Germany. “The federal capital traded around €2.3 billion and more than 32,300 residential units last year, which accounts for 37 per cent of the registered investment volumes and 37 per cent of all residential units in Germany. As a result of the large transaction volumes and high-end development projects in Berlin, the average price per sq m increased to €1,033.” (more)
BRUSSELS — Germans’ attitudes about their standard of living have remained relatively buoyant throughout the recent eurozone crisis. In 2011, 31% of Germans said their standard of living was getting better — even higher than before the global financial crisis hit in 2008. Germans’ satisfaction with their standard of living has remained remarkably stable in recent years, at 88%.
Gallup surveys also show Germans’ economic outlook has improved markedly in recent years. In 2011, 47% of German residents said their local economic conditions were getting better, up from 34% in 2010. The increase in optimism regarding the job situation was even more pronounced. The proportion of Germans who said that it was good time to find a job in the city or area where they lived jumped to 50% in 2011 from 22% in 2010.
These positive developments were accompanied by Germans’ growing belief that they can get ahead if they work hard. More Germans said they can get ahead in life by working hard in 2011 and 2010 than in years prior. (more)
Transactions involving the purchase of 50 or more residential units increased by 44% year on year in Germany last year, with 6.12 billion Euros transacted over the course of the year according to new data from CB Richard Ellis. Further, the number of units transacted also increased, with 92,000 units transacted across 194 transactions representing a 27% increase over 2010. This indicates an increase in appetite for portfolios of over 1000 units according to CBRE.
According to the data Berlin saw particularly strong residential demand. Apparently some 32,300 residential units were traded to a value of 2.3 billion Euros. This figure means that investment volumes in the federal capital were 37% of recorded investment volumes for Germany as a whole and also that the number of units sold represents 37% of residential units sold across Germany in 2011. This massive level of activity led to a surge in high end development projects in the city, and also triggered a rise in the per sqm price, which went up to 1,033 Euros. (more)
FRANKFURT—German manufacturing orders rose more than expected in December, driven by a surge in demand from outside the euro zone, in the latest sign that Europe’s largest economy may yet avoid recession despite the euro zone’s debt crisis.
New orders rose 1.7% on the month in adjusted terms, after slumping by a downwardly revised 4.9% in November, data from the economics ministry showed Monday. Experts polled by Dow Jones Newswires had expected an increase of 1% in December.
While German orders data are “very volatile”, the latest figures “seem to suggest that factory activity has not collapsed,” even after German economic growth moderated in the fourth quarter “as demand from abroad was hit by the global slowdown,” said Annalisa Piazza, a strategist at Newedge in London. “If anything, a slight pick-up is expected in the first quarter of 2012,” she said.(more)
If you want to bag yourself a bargain in an up-and-coming city, Berlin is the place to look, says property guru Jonny Benarr
Some 135 million people visited Berlin in 2010 and it’s no wonder given the city’s unique and vibrant energy. This is evident in everything from the eclectic architecture to the open, friendly attitude of its people.
Germany is also a financial powerhouse and one of the most stable economies in the world. An estimated 84% of the city’s population rent rather than own. And, compared with capitals like London and Paris where you can expect to pay in excess of €10,000 per m2, in Berlin that figure is less than €3,000 per m2. Low-cost property combined with high rental demand equals an investor’s dream.
Darrell Smith from Buy Berlin (www.buyberlin.co.uk) is an estate agent and property finder dealing with both residential and commercial sales and lettings.
“Although compared with other European capitals Berlin is considered cheap, that is not going to be the case for long,” he says. “Historically, Berliners were happy to rent long-term, and many still will be, but with increasing rental costs they are switching on to the fact that it can be cheaper to have a mortgage.” (more)
Berlin experienced a record year for its office market in 2011, driven largely by a burgeoning technology start-up scene that is starting to attract the big players.
Surrendering to cliché, it appears that a new ‘Silicon Valley’ is springing up in the German capital after a 24.5% surge in office space leased by IT companies over the past 12 months.
Online retailers Amazon, Groupon and Zalando have all been attracted by Berlin real estate market’s relatively low rents and steady property prices.
When this is combined with a young, well educated and creative workforce, it creates an ideal location for start-up companies in the technology, media and telecommunications (TMT) sectors looking for the most talented workers. (more)