Various markets in Germany such as Berlin, Hamburg and Leipzig
are being assessed by Property Frontiers’ Sourcing & Legal
Diligence departments. We have found that Germany actually proves
to be one of the most challenging countries for the real estate
investor. With low ownership rates (only 15% own property in Berlin
and around 40% nationally), low yields compressed to as little as
2.5% in some regions, and mortgage acquisition extremely difficult
for non-resident foreign investors, the investment justification is
not quite as transparent as one would hope. Although the economy is
now going through some extraordinary alterations due to the latest
government, national confidence in acquiring mortgages and in
owning real estate is very low and therefore produces an “exit
strategy concern”. With the general economy growing relatively
slowly and low levels of foreign direct investment, wages are not
increasing rapidly and therefore the ability for German nationals
to pay higher rents or to take on mortgages in the future is also
very questionable. With average tenancy contracts around 7 years,
and rent rises capped at 20% every 3 years, yield compression is a
further worry for the investor market. To be informed once Property
Frontiers has uncovered the best investment opportunity in Germany
for real estate investors