Europe Hottest Property Market Right Now - Germany

Europe Hottest Property Market Right Now - Germany

 Believe it or not, Germany has one of the hottest property markets in Europe. No, people don’t normally see Germany as one of the top players in the real estate market, although Germany’s standing as one of the world’s leading industrial powers and richest countries is beyond doubt. 

That’s because the net immigration into Germany is pretty low, compared to Britain, Spain or the United States. But that has been changing over the last few years. What does this mean for you if you are eager to sell your apartment in Germany online in 2017? Let’s find out!

 A report by Postbank, a major financial institution in Germany, highlighted the fact that property prices in the biggest German cities such as Berlin, Munich, Hamburg and Frankfurt, had moved to an unprecedented high. While the rest of the Eurozone has been struggling, the real estate market in Germany has been doing spectacularly well. Why is that?

There are many reasons for the rise of the German housing market. Germany has recently emerged as a major hub for immigration. Over a million refugees have immigrated to Germany over the last couple of years. Millions more economic migrants from third world countries have moved to the country as well.

This has certainly caused many social tensions in Germany, but it is good news for the real estate industry as it creates more demand for real estate. There are many old buildings that were left uninhabited in many German cities that have now been taken over by real estate developers and transformed into cheap apartment complexes for the new wave of immigrants into the country.

Germany has always been an industrial superpower. But over the last decade and a half, cities such as Berlin and Frankfurt have become major financial centres. They compete directly against the City of London, in this regard.

Brexit has been a major negative for London, and caused many international banks and financial institutions to look elsewhere. Berlin has been an obvious beneficiary. As top banks such as JP Morgan and HSBC relocate their offices to Berlin and other German cities, we expect the demand for apartments for sale in Germany to skyrocket.

 Indeed, apartment prices in Hamburg have risen by a record 70 percent from 2010 to 2015. This is incredible when you consider the stress that much of Europe was under during this time.

What’s also propelling the property market in Germany has been the regime of low interest rates. Cheap home loans are widely available in Germany and this has compelled many middle class residents to buy apartments in Germany online.  

Historically, the German middle class is predisposed to renting an apartment rather than buying one. Indeed, 92% of the households in Germany live in rented accommodations. But that has been changing of late.

 Things are certainly moving in the right direction in Germany. But the government can help by getting rid of measures that hurt the real estate market such as artificial rent controls. As long as the rents in Germany are kept artificially low, more people would still prefer to rent an apartment than to buy one. 

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