Berlin Residential Property Market - Why Invest in 2008?

The economic environment

The outlook for the German economy is positive and the economic recovery continues. 2008, a change is purely driven by export growth, to see more growth support through domestic demand. For the first time in years significant raises in salaries are currently being negotiated and consumer confidence are seen as friendly. This will be associated with further decline in unemployment in combination, as the company prepared to have to recruit staff. Growthcan be expected in the economy, to stimulate the German real estate market.

The Local Aspect

In 2006 the Berlin economy grew by 1.9% and 7,000 new jobs were created. While growth is below the German average, the increase in jobs and the decline in unemployment is well above the average. These figures reflect that many companies have decided to grow their business in Berlin or the establishment of new offices and branches here. The focus is on innovative media andTechnology.

The population is stable at 3.4 million after a period of migration in the 1990s in the newly available to the suburbs after the fall of the Berlin Wall.

The German real estate

Germany has a large influx of capital to the international real estate market in the last 2-3 years with record year 2006, as was a record year still outranked seen in 2007. The year 2008 is seen by most market participants as a year of consolidation. More and moreinstitutional investors are providers should offer interesting opportunities for smaller and private investors, since it is unlikely that all sales will be in big packages.

The Berlin property market

After years of stagnation the Berlin property market are booming began in 2006, which has carried on in the year 2007. In particular, international investors have a record number of homes undervalued absorbed. Its 2006 sales rose 50% to a record level of 15.8Billion. Of course, this has led to a price earnings of the first 8 to 10%, are no longer acceptable to reach locations. The yields in prime locations are less than 6%, while still producing good locations like Steglitz offers 6.5 to 7%, many of them) with short-term development potential (upside.

The new rent table 2007 ( "Consumer protection 2007") has already shown that increasing the rents. The picture is variable between stable and growing.

Is not ittoo late to jump on the train?

No, it's not too late! Attractive property, even at entry level is still in the market, with a positive cash flow and a realistic expectation for capital appreciation. Careful research is needed to ensure that the information provided by the reality met after the purchase. Market knowledge is required, or on-site assistance is recommended.

Conclusions

The economic situation in Germany with the prospect of a longer period of positiveProsperity. The Berlin property market has three key value drivers:

Stable development of the population accompanied by new jobs.


The long-term commitment to the site of the government and international business.


Even low prices compared to other European capitals with yields that allow a positive cash flow after funding.

With a follow-up article I will provide information about the rent in different parts of Berlin and various types of buildings.You can find this article on the authors site below.