Purchase cost for German Real Estate 2015

One of the most asked questions by investors new to Germany is regarding the typical cost involved in making a real estate investment.

The cost depends on the price of the property the cost tables for the notary public and the land register relate to is as value of the transaction. They are degressive, in other words, the higher the price, the lower the percentage of the cost.

Another cost factor is the property sales tax (stamp duty) which varies in the German states (see table below).

Last but certainly not least there is the commission for the property agent. These also vary in different areas of Germany and are easily obtained from the offer you are looking at.

Depending on your financing there will also be a cost for entering securities into the register, relating to the amount to be secured. Because the financing varies individually, this is not included in the examples.

For the purpose of the examples it is assumed that the property is bought in Berlin

Click on the table for a bigger pdf-version.

Property sales tax (stamp duty) in the German states 2015

Further cost will be incurred in the context if financing which may include due diligence and cost for notary and register for the entry of securities into the land register.

Purchase cost for German Real Estate 2015

Housing Market Report Berlin 2015

Housing Market Report 2016 now available, just click this text

Further increase in demand drives up rents and prices in peripheral locations

• Asking rents for apartments increase in 2014 by 6.6 per cent to € 8.55 per square metre
• Demand pressure shifts from established prime locations to inner-city peripheries and the peripheral residential areas
• No price bubble anticipated, but inflated prices in individual locations evident
• Lively financing market with controllable risks for banks - New build volume increasing, but insufficient to satisfy demand.

 The peripheral locations on the Berlin housing market are becoming increasingly attractive. Following the particular concentration of rent increases in popular inner-city areas in recent years, pressure of demand is increasingly shifting to inner-city peripheries, areas outside the centre with good transport connections and to modest city outskirts. This is one conclusion of the latest Housing Market Report Berlin, jointly published for the first time this year by Berlin Hyp AG and CBRE GmbH, which presents current developments and background information on the Berlin housing market. It is based on the evaluation of more than 100,000 recorded offers for rental apartments and condominiums as well as apartment buildings in the first three quarters of 2014. All rental apartments have been assigned to the 190 Berlin postcodes, enabling small-scale analyses and trend observations of micro-locations.

Please enter your name and email below to receive further information and a download link for the report.

Housing Market Report Berlin 2015

Prices for German residential and commercial property in 2014

The fourth quarter of 2014 saw the rise in price

for German residential and commercial properties continue further. The vdp property price index advanced 5% on the corresponding quarter one year earlier and currently stands at 122.6 points.

Rise in residential property prices continues; commercial property price increases weaken slightly.

Multi-family houses:
+ 7.2 %*
Owner-occupied residential housing:
+ 4.3 %*
Office properties:
+ 1.9 %*
Retail properties:
+ 3.3 %*
Q4.2014
* compared with the same quarter the previous year

These are the results of the vdp Property Price Indexjust published. For the full report follow this link.

For support in the identification of the right investment targets please visit our website at www.falkenberg-solutions.com. 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. Please use this link to the contact facilities provided there to place any requests .
Uwe Falkenberg

Prices for German residential and commercial property in 2014

Germany House Prices 2013 in International and Historical Perspective

The economic research institution of Deutsche Bank DB Research has published their results on current property prices in Germany. Here is the translated content:

Germany house prices in international and historical perspective. 

With the rise of the German house prices concerns have increased that a housing boom has begun, which could end up with noticeable negative impact on the German economy. Our analysis of house price cycles in OECD countries shows that the current price increase in Germany, compared with past climbs, are moderate. Compared with other OECD countries, Germany shows even well below-average prices. We expect that the increase in real estate prices will continue in Germany, but the formation of a bubble is unlikely and the price increases are the normalization of the total housing market.

The development in different areas are obviously different. Munich and Hamburg are closer to a possible "bubble" than e.g. Berlin which is still highly undervalued compared to other European capitals like Warsaw and Budapest, not to mention Paris or London.

For support in the identification of the right investment targets please visit our website at www.berlin-portfolio.com. 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 

Germany House Prices 2013 in International and Historical Perspective

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.

http://germanproperties.blogspot.de/2013/06/update-increase-or-property-sales-tax.html


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 www.berlin-portfolio.com.

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

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:

http://www.gesetze-im-internet.de/englisch_bgb/index.html

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

English Translation of the German Civil Code - German Tenants Rights

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

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 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 www.berlin-portfolio.com. 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

October 2013: Berlin Residential Real Estate and Investment Property Market