Friday, 18 October 2013

From January 2014 Property Sales Tax in Berlin up by 1%

Properties in Berlin
It is official now: Last Tuesday the Berlin City Government (Senat) has passed the increase of the property sales tax from 5% to 6% of the purchase price. It is expected that it will pass the city parliament (Abgeordnetenhaus) as the coalition gavernment has a majority there. The last raise from 4.5% to 5% was only in 2012.

The declared purpose is to improve Berlin's disasterous debt position. We had posted up front information in June when the plans transpired.

Anyone planning to buy a Property in Berlin should move fast now because there are really only 8 weeks left to check any property, get the financing in place and the contract agreed. To speed up this Pre-Aquisition and Purchase process we provide a specialised service for international investors. For more information and contact please visit our website


Sunday, 6 October 2013

English Translation of the German Civil Code - German Tenants Rights

There is a lot of confusion amongst international investors about tenants' rights in the German Residential Market. One thing needs to be clarified at the outset, German tenants have more rights than investors from western societies are used to. The historical background is the vast destruction of residential buildings during the war and a need to protect the needy in a time of scarcity.

Now it has turned into an election ritual to improve tenats' rights prior to elections since the majority of voters in Germany are still tenants and not owners. The conservative Merkel government makes no exception in this game and has enabled local governments to limit the rent increase to 15% over a time period of 3 years just before the elections.

The main legal structure for tenancy law is the German Civil Code (BGB - Bürgerliches Gesetzbuch) and there is an official translation available on the website of the German Ministry of Justice:
The regulations regarding tenancy are in Title 5 of the code.

This will give you some idea what a paragraph quoted in a contract or legal document is about - but please refrain from making any legal interpretation on your own without legal council or at least feedback from your property manager. The German judicial system is not determined by precedence as much as the Anglo-American system but there is up to date high court ruling to be taken into consideration for the interpretation of the civil code. So the translation is to be used only as an indication of the subject that is addressed.

Uwe Falkenberg


Friday, 4 October 2013

October 2013: Berlin Residential Real Estate and Investment Property Market

Berlin residential real estate and investment property market

Residential market :

  • 87 % of the housing stock is rental housing
  • Extensive historical buildings in Berlin available
  • the average basic rent at approx € 7.50 / m² ( 2012, increase of 13.8 % on 2011 )
  • price level well below other international capitals
  • High demand for housing in high income and demanding segments of the population
  • Low residential construction (about 3,000 units per annum )
  • Many of the houses are in good condition ( “Reconstruction East” , renovation through tax incentive models), extensice renovation of pre-war buildings

Rental Housing Market :

Young Metropolis Berlin
Young Metropolis Berlin
Also in 2013 , the popularity of Berlin as "a place to be" will continue. Sustainable rising rents and very good predictions for the housing market have ensured that in addition to private investors who have always viewed Berlin as an investment hub, the traditionally slower Institutional Investors appeared again as buyers. There are almost on a daily basis headlines about big package deals.

For many high net worth private investors the reasons to invest in Berlin Residential Property have been obvious: A stable investment in troubled times.

Interest rates are historically low , the rents rise above the rate of inflation and the vacancy rate is narrowing. Properly managed resources generates returns that do not exist in other forms of investment for the foreseeable future.

The supply shortage is going to cause further moderate price increases. The average prices in Berlin so far have remained remarkably moderate. In general although there were increasing purchase prices no price bubble has built up.

For investors in 2013 , Berlin is a more promising market, as opposed to other German cities that are even shorter in supply of interesting investments. In the German Capital one can make attractive investments through systematic search, while the Investment property market in other cities has come to a massive slowdown due to the low supply of opportunities.

" Window of Opportunity "

Why invest in Berlin?

Berlin Marathon
Berlin Marathon
Berlin is attractive and popular. The Berlin Marathon on the last Sunday in September brings visitors from around the world. Many decide to buy some property because they like the atmosphere of a growing young metropolis.

  • Berlin is a favorite among private and institutional investors with a specialization in Residential Properties.
  • Favourable yield levels and prices per sqm compared to other European cities, especially capitals.
  • Yield level will adjust soon adjust to other European cities > will lead to price increases.
  • Positive population growth.
  • Increasing number of single households and commuters.
  • Low volume of new construction.
  • Rental increases continue.
  • Property prices continue to rise.
  • Cheap redevelopment prices.

For support in the identification of the right investment targets please visit our website at Especially for international Private Investors and Property Funds we provide a task force service for quick reaction to interesting opportunities. We provide independent support for the property search including foreclosure or auction properties and their valuation or appraisal. (Also see our free property market Research Service) Please use this link to the contact facilities provided there to place any requests .
Uwe Falkenberg