Deutsche Bundesbank: There is no property bubble in Germany

There are always those predicting doom and if they just keep doing so long enough they might be right one day and nobody counts the false alarms - they hope. The Deutsche Bundesbank (German Central Bank) does not belong in this category but is known for being very cautious about price developments, especially when they have an impact in banks lending policies for properties.

Only in May of this year Dr. Andreas Dombre, a board of directors member at the Deutsche Bundesbank warned about a price bubble building up in the German property market and the fact that you can't predict the actual "pop" only acknowledge when it happened.
Speech transcript in German:  https://www.bundesbank.de/Redaktion/DE/Reden/2017/2017_05_04_dombret.html#doc398274bodyText2

Photo by Markus Spiske on Unsplash

Asked about the topic at a press conference on 30.08.2017 introducing "Results of the 2017 low-interest-rate survey" Dombre stated that the Deutsche Bundesbank currently does not see a property bubble but fears a tendency that financial institutions are considering taking higher risks in residential property financing. Press release: https://www.bundesbank.de/Redaktion/EN/Pressemitteilungen/BBK/2017/2017_08_30_joint_press_release.html

 

Especially in the Berlin housing market, we are successfully sourcing off-market investment opportunities for private investors in the popular segment between 1 and 2 million Euros as well as high-end private homes and villas. For more information please contact us at: http://www.berlin-portfolio.com/feedback.html

 

 

Deutsche Bundesbank: There is no property bubble in Germany

Sharp price rises continue for condominium apartments in #Berlin - JLL Report First Half 2017

The sharp rise in purchase prices for condominium apartments continued in the first six months of 2017. Compared to the same period last year, asking prices for condominium
apartments rose by around 12.5% to €3,730 per sqm.

Source: JLL Residential City Profile Berlin 1st Half 2017

The trend of higher price rises observed over the past six months is therefore ongoing, and prices are continuing to grow at a similar rate as in the period between 2011 and 2014. The average growth rate since the onset of the current upswing which started in 2009, is 10.9% per annum. Purchase prices have risen by an average of 6.5% per annum, or by a total of around €2,130 per sqm since records began in 2004. If prices continue to rise, which appears likely at present, it is possible that the average purchase price will break through the €4,000 per sqm barrier, bringing Berlin up to the price level of Stuttgart.

Download the full report with details on all Berlin districts:

Residential City Profile Berlin - 1st half-year 2017

We provide support for finding the right property investment in Berlin - but we are not agents, or only in very few cases. Investors can rely on our impartial professionality. We don't only know about the sales process but also a lot about running a property to make it perform at its best potential.

Contact: http://www.berlin-portfolio.com/feedback.html

Sharp price rises continue for condominium apartments in #Berlin - JLL Report First Half 2017

Sharp Rise in Rents in #Berlin - JLL Report First Half 2017

Asking rents in Berlin increased to €10.80/sqm/month in the first six months of 2017, approaching the €11.00/sqm/month mark. The last time rents increased as sharply was in the first half of 2012. Then, the annual increase was 13.1%, compared to the current 12.8%. Since 2016, the housing market has returned to a phase of strongly rising rents. The upswing in the Berlin housing market began in the second half of 2006, initially with moderate increases (+3.0% per annum) until 2011, and then with significantly stronger momentum (+8.0% per annum).

Overall, rents have risen by an average of 6.1% since the beginning of the cycle in 2006, and have almost doubled over that period. Given the high demand and lack of supply, rents can be expected to increase further over the next six months.

Source: JLL Residential City Profile Berlin 1st Half 2017

 Download the full report with details on all Berlin districts:

Residential City Profile Berlin - 1st half-year 2017

We provide support for finding the right property investment in Berlin - but we are not agents, or only in very few cases. Investors can rely on our impartial professionality. We don't only know about the sales process but also a lot about running a property to make it perform at its best potential.

Contact: http://www.berlin-portfolio.com/feedback.html

Sharp Rise in Rents in #Berlin - JLL Report First Half 2017

Chinese investors seize on cheap #Berlin properties

Photo by Artem Sapegin on Unsplash

Investors 'unaware' that tough tenancy laws limit potential for rental growth

JENS KASTNER, Contributing writer at NIKKEI ASIAN REVIEW





This article provides different views of the situation in the Berlin Housing Market and how long distance and lack of local knowledge are exploited by some selling to Chinese Investors. But the treatment was no better when Irish Investors invaded the Berlin property market 10 years ago.

Read the full article here: NIKKEI ASIAN REVIEW

We provide support for finding the right property investment in Berlin - but we are not agents, or only in very few cases. Investors can rely on our impartial professionality. We don't only know about the sales process but also a lot about running a property to make it perform at its best potential.

Contact: http://www.berlin-portfolio.com/feedback.html

Chinese investors seize on cheap #Berlin properties

Surprize Results In The Top 50 House Price Index: #Berlin at No.18 and Waterford, Ireland at 9

The Hurun Research Institute released the Hurun Global House Price Index 2017 Half-Year, listing the 50 cities with the highest house price changes in the twelve months to 30 June 2017.

China housing prices growing fastest in world

 6 Chinese cities in Top 10 & 21 in the Top 50

Toronto jumped 26% yoy, Number One in world

Hong Kong Top 5, with house prices rising 20.8% yoy

Wuxi fastest growing city in mainland China; Zhengzhou, Changsha, Guangzhou and Shijiazhuang in Top 10

USA, with 15 cities, led way for highest global property ROI (housing price change + RMB change + rental yield), followed by Germany (5), Australia (4) and Canada (4)

 The ranking for individual cities shows some surprizes:

Source: hurun.net

There are only 7 non-Chinese cities in the top 20 (blue frame) out of which 3 are European.

The report also looks at the ROI where Berlin ranks at No. 16. You can download the press release including the ROI ranking here ⇒ Hurun Report 1 - 2017 Press Release.

Surprize Results In The Top 50 House Price Index: #Berlin at No.18 and Waterford, Ireland at 9

EMEA Investors Intentions Survey by CBRE: Germany at No.1 again with Berlin moving up to No.2 city

INVESTOR INTENTIONS SURVEY 2017

Berlin moved up to No.2

 The CBRE has arrived at these conclusions:

• Economic conditions are positive and investors have ample capital to deploy in real estate
• In EMEA, investors are planning for $475 billion in real estate investments in 2017
• For 2017, 85% of investors intend to spend at least as much as in 2016, and 40% expect to spend more
• Germany is ahead of the UK as the most attractive place to invest, as was the case in 2016, but investors are showing an increasing tendency to invest in the UK despite uncertainty over Brexit
• The Nordics enters the top three with a significant jump compared to 2016
• London retains the top spot as most popular city to invest in with an increased share, but Berlin shows the biggest increase, moving into second place
• ‘Pricing’ and ‘Availability of product’ are the biggest obstacles to investing in EMEA real estate
• Office is the most popular sector: interest in logistics has increased
• Risk appetite has increased slightly
• Income related factors such as ‘Yield relative to other asset classes’ are investor’s key motivations for investing in real estate

  The full report is available: https://researchgateway.cbre.com/PublicationListing.aspx?PUBID=6e0d802a-c164-48fd-acb3-1057547a0312 

Another interesting result is the preferred property type:

For support in property search and optimisation of property operation please visit our website http://www.berlin-portfolio.com

EMEA Investors Intentions Survey by CBRE: Germany at No.1 again with Berlin moving up to No.2 city

How secure are you when buying off-plan property in Germany?

Buying Off-Plan Properties, i.e. properties that are not yet as they are supposed to be according to the purchase contract, can be seen as risky. This could be a family house or a condo yet to be built or renovated. There is a building specification and some material samples trying to describe what the property should look like when it is finished.

In an ideal world for the buyer, no money changes hands before the project is finished and the result is satisfactory. For the developer, there is the worry if the buyer can and will pay once the project is finished.
In the German legal system, there is a regulation with a monstrosity of a name: Makler- und Bauträger Verordnung (MaBV),  which can be translated as Agent and Developer Ordinance - not much better. I will ignore the part dealing with agents for this purpose.
This ordinance regulates when and under which conditions a developer is allowed to take money from a buyer or the buyer's bank. Yes, this is right, he can not only not ask for the money if the conditions are not fulfilled, he is not even allowed to take it if you offered it - who would?
The regulation defines 13 instalments of the purchase price related to the building progress. Only up to 7 instalments are allowed, meaning that the developer will provide a payment plan which will bundle some of these instalments.

Here is an infographic about the 13 instalments:

Instalments according to MaBV

To receive the full-size infographic and detailed information about all aspects of the security system for Off-Plan Property buyers in Germany including a translation of part of the actual regulation regarding the payments please leave your information below. After the usual confirmation email, you will receive an email with the download link and an extensive report.

How secure are you when buying off-plan property in Germany?