Real Estate Investors in Germany Unfazed by the Refugee Crisis

Real Estate Investors in Germany Unfazed by the Refugee Crisis

 Over one million refugees entered Germany in 2015, and many more have entered the country in 2016. There are many who are very worried about what the massive influx of refugees into Germany would mean for its property market. What does this mean for you if you’re looking to sell your apartment in Germany fast this year?

For a start, real estate investors in Germany are pretty relaxed about the whole thing. They say the property market would be largely unaffected by the refugee crisis.

Indeed, 33% of the real estate investors in Germany said they were either “positive” or “generally positive” about the real estate market in the country – in spite of the refugee problem. In fact, only 22% of those surveyed said they were worried.

 There is a simple reason for this. A lot of properties that would have otherwise stayed empty have suddenly become valuable to property investors. Many office buildings that were built in the 1960s and are located in unpopular locations can now become valuable again, after their conversion into residential quarters for refugees.

 Indeed, in the German real estate industry today, conversion has become the buzzword. The conversion of old, forgotten properties in urban locations is expected to generate a lot of money for real estate developers over the next few years.

The demand for housing is huge and has never been bigger in Germany. We are in fact at the beginning of a secular boom in the housing sector here. Any additional demand for housing will only serve to fuel the boom further ahead. Already the European Central Bank has done its bit to encourage investment in the real estate sector in Germany and across Europe by offering loans to national banks at a zero percent interest rate.

 There are some, however, who say that although the situation looks rosy right now, it may not be so in the future, as there are only so many refugees that Germany can accommodate. A top real estate developer said that there would be a demand for 400,000 new apartments in Germany every year because of the influx of refugees.

 He said that the refugees wouldn’t create an immediate demand for new housing, but that might change a year or two from now. That’s when the market will feel the strain from all the additional demand for new apartments for sale in Germany.


 The way out is to create more residential space by adding floors to existing buildings. Another great option is to reintroduce prefabricated concrete buildings that were once so popular in East Germany. Such constructions would make it easier to build multi-storied apartment complexes in the country.

Affordable housing is possible, but it would require a lot of innovative thinking from real estate developers in the country. Certainly, things are moving pretty fast in the real estate sector in Germany. As Nico B. Rottke, a partner at Ernst & Young says, there is “a very clear trend” in the favour of aggressively financed real estate deals in the country.


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