German Housing Market – Price Development in 2015 (Deutsche Bundesbank)

The German Federal Bank (Deutsche Bundesbank) has provided an analysis of the developments in the German Residential Market in their Monthly Report February 2016 https://www.bundesbank.de/Redaktion/DE/Downloads/Veroeffentlichungen/Monatsberichte/2016/2016_02_monatsbericht.html. The analysis is based on research data published by other institutions like vdp (Verband deutscher Pfandbriefbanken) or bulwiengesa AG.

 Price Development

In 2015 the prices for residential properties saw a significant increase. The spread across the country was wider than in the previous year. The price effect of growing demand combined with continuing favorable financing conditions was again stronger than any increase in availability of housing. Based on price determining economic and demographic factors the value of properties in urban areas will remain high and growing.

Based on information by bulwiengesa AG, prices for residential properties in German cities increased by 6% in 2015 after 5.5% in 2014 and 7.5% in 2013. The prices increase for condos was 6.5%, higher than single and semi-detached houses. Also the price increase for multi-tenant blocks was higher than the annual average since the beginning of the recent upswing in the German property market.

The average price increase for residential properties across all types in big cities slowed down compared to previous years and was the same as in cities in general at 6.25%. The increase for apartment blocks was at 7.25% by 2.0% higher than the average since 2010.

Rent Development

For new rental contracts in cities the increase was at 3.25% close to the previous year’s figure whereas the rent increase for new built apartments slowed down. In big cities the slow down on both categories was discernable. Whether this was due to the rent cap introduced in 2015 in Berlin, Hamburg, Düsseldorf, Frankfurt a.M., Köln, München Stuttgart and several smaller cities and towns.

Economic and Financing Development

The steady economic development in Germany with positive outlook for income and employment supported a strong demand in the residential market. While the price-income-ratio for owned housing increased over the period of the last 3 years the average interest rate decreased in 2015 by 0.5% to fewer than 2%.

German Housing Market – Price Development in 2015 (Deutsche Bundesbank)

How to Find the Answer to a Burning Question About Your Property Manager: Where is My Money?

 Book Review

A practical tool for a Property Management Audit and Self-Audit, this eBook provides a checklist and user guide to cover the key areas of Property Management Services. This tool supports Property Owners and Asset Managers in their assessment of the performance of their Property Manager and the possible, in most cases quantifiable, impact of the quality of service.
The tool also allows an internal auditor to take the outside in view and thus supports quality control for managers responsible for running property management businesses or internal departments of investment corporations.The checklist can be applied to all property asset types, residential, office, retail and any other rented property. Some details are focused on the German and especially the Berlin property market but this does not disturb the general usability in other regions.
The guide explains in detail the intention of the questions and demonstrates the relevance through some real life case studies. The author highlights the consequences of “just letting things take their course” and shows the impact of a legal structure called “Statute of Limitations” and how it applies to the owner – property manager relationship. The exclusion periods vary in different countries but the general fact is present in most legal systems.
It would be a mistake to view this list purely as a raised finger: Caught You! For a successful operation and positive development of a property a structured communication between the owner and the property manager beyond the monthly reports is very much needed. This tool helps to cover the important areas and forces the owners to clearly formulate their expectations.
The eBook also contains a link to download a complementary electronic version of the Property Management Audit Checklist without commentary.

The eBook is available on Amazon, click the link to get to teh download page.

“How to Manage Your Property Manager

25 Questions You Should Ask Every Year – A Checklist”

 You might have to change to the shop of your county.

How to Find the Answer to a Burning Question About Your Property Manager: Where is My Money?

Housing Market Report Berlin 2016

The gap between supply and demand in the Berlin Property Market keeps growing. According to the Housing Market Report Berlin 2016 published by Berlin Hyp and CBRE the efforts made by the government introducing new rent caps had little effect on the rent development.

 The report shows that on average the rents offered rose by 5.1% just below 9.00 Euro/m² (2014: +6.6%). The increase in Mitte was ca. 7.0% while Friedrischshain-Kreuzberg and Reinickendorf rose by 5.9%. The lowest increase was in Lichtenberg at 0.9%.

As reasons for the strong increase two main factors are stated:

1.      1.Steady increase of the Berlin population through steady influx based on the apparent attraction Berlin has.

2.      The number of new projects especially in the central districts. The rent caps don’t apply to new apartments coming into the market.

Condo prices rose by 10.1 % on average with the biggest increase in Steglitz-Zehlendorf (+16.3%).

The Housing Market Report Berlin 2016 is available for download on our website www.berlin-portfolio.com.

Housing Market Report Berlin 2016

Property Management Case Studies

Anyone can decide to start a Property Management in Germany. No qualifications or permits are required. It is vital for the well being of a property investment that the owner checks all the aspects of the management frequently or as a long distance investor have someone do this on the owner's behalf.

We are always astonished about the things that can happen in a Property Management and for how long it can go unnoticed. For illustration purposes we have compiled a small selection of actual Property Management Case Studies, just the names were changed. Here are the topics currently available:

1. Regular Rent Increase Forgotten!
2. Trouble with the Re-Renting Process.
3. Property Manager with Criminal Energy.
4. No Documentation of the Building and Investments Made.

To read the details, just follow this link Property Management Case Studies. It will take you to the relevant section of our website.

Property Management Case Studies

City of Berlin Population Will Increase 7.5% by 2030

The City of Berlin has just published the population forecast up to 2030. The numbers are broken down to the level of districts; even more detailed area data will be available in February.

From 2012 to 2014 the population net increase was 135,000. For the forecast several models were used and the variant with the “middle” result was chosen as a foundation for future planning of personnel in public services, infrastructure and transportation. The higher version for the prognosis takes into account a higher number of refugees as well as a higher number of “natural” influxes because of higher economic prosperity assumptions.

One of the big unknown factors obviously is the number of immigrants and refugees. For the period 2015 – 2020 the variation is ranging from 94k to 174k.

The population development has huge impact on the Berlin Housing Market and the prognosis provides valuable information for future development of demand for apartments in general but also specifically type and location.

The main results of the prognosis based on the “middle” variant are:

• The population of Berlin (City without Brandenburg suburbs) will grow by 265,000, ca. 7.5%, to reach 3.828 M by the year 2030.
• The average age will increase to 44.3 years from 42.9 in 2014. The increase is caused by disproportional increase in “over 80s” 66% and “over 65s” by 12%.
• The active working age share of the population will rise minimally by 16,000 to reach 2.36 M with a constant number of young adults (18-25) of ca. 262k.
• The number of children under 6 will reach ca. 206k and the age group 6 to 18 will increase by 22% to reach 414k.
• The district with the highest expected population growth is Pankow (+16.0%) and the lowest rate for Tempelhof-Schöneberg (+2.6%).

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The population development by district demonstrates a significant movement from the city center to the more affordable north and northeast of the city with actually negative values for Mitte, Friedrichshain-Kreuzberg and Charlottenburg-Wilmersdorf.




The source of the information in German is www.stadtentwicklung.berlin.de.

The interpretation of the data made available for Property Investment and Property Management will be different based on the goals of the activity. The age bracket forecasts e.g. are most interesting for special properties like assisted housing for the elderly whereas the location data will be of interest for all types of market activities.

Detailed data for 60 city regions will be available in February 2016. If you are interested in receiving the information, you can either sign up to this blog or send me a short feedback on our website www.falkenberg-solutions.com. You can access the feedback form on the right hand side of the webpage.

City of Berlin Population Will Increase 7.5% by 2030

Berlin No.1 in City Ranking for Real Estate Investment - by Urban Land Institute

Emerging Trends in Real Estate® Europe 2016

According to Emerging Trends Europe, the five leading cities for investment prospects in 2016 are Berlin at Number 1, followed by Hamburg, Dublin, Madrid and Copenhagen. Many interviewees back the German capital to thrive well beyond 2016, based on its young population and its growing reputation as a technology centre, as well as the land available for development.

The Report is avaiable for downloading at the website of the Urbal Land Institute (ULI)

http://europe.uli.org/report/emerging-trends-real-estate-europe-2016/

For support in property search and assessment in the Berlin Property Market please contact us directly: Contact form

Berlin No.1 in City Ranking for Real Estate Investment - by Urban Land Institute

Berlin is Globally Ranking Fourth For Foreign Real Estate Investment

Despite moderate concerns about the impact of higher interest rates, 64% of respondents to the 24th annual survey taken among the members of the Association of Foreign Investors in Real Estate (AFIRE) and released today say they expect to have modest or major increases in their investment in US real estate in 2016.  Another 31% say they expect to maintain or reinvest their investments. No one plans a major decrease.

For the second consecutive year, New York outranked London as the top global city for foreign real estate investment. Berlin, ranking fourth, became the first German city to be named among the top five global cities:

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These are some of the findings of the Association of Foreign Investors in Real Estate (AFIRE)
More details in their press release:
http://afire.membershipsoftware.org//Files/2016_Survey/Public/2016_Survey_Press_Release.docx

For detailed information about the Berlin Property Market also visit our website.

Berlin is Globally Ranking Fourth For Foreign Real Estate Investment