Why Invest in German Residential Property?
The current German residential stock consists of approximately 39 million units (both West and former East) of which 56% are rented; therefore Germany 's home ownership ratio is approximately 44%.
The following factors are expected to affect the market over the next decade:
- Rents and property prices can be expected to rise as both price per sqm and rent per sqm have been weak in the past decade.
- Home ownership is projected to increase from current level of approximately 44% to the European average of 60%-65% in the coming decade.
- Some property companies are under pressure to sell due to liquidity issues.
- While the population stagnates, the number of households is rising. This means there is currently a stable demand situation, particularly in attractive cities.
- Interest rates in Germany are currently at or near historically low levels.
- Property can frequently be acquired at prices significantly below development/build costs.
Why Invest in German Commercial Property?
- German economic recovery is well underway.
- German property market has substantially underperformed other European markets over the past decade - no boom and bust!!
- Germany is the world's second largest exporter and remains Europe's largest economy.
- Central location at the heart of Europe.
- Cost of financing still attractive.
- No currency risk.
- Transparent tax and legal system.
