german property interest high as investors seek safety
News Posted On: 29 July 2011
Although investing in German property may not bring spectacular profits, it is increasingly being seen as a safe haven by investors who now consider the markets and banks as being just too dangerous. Increasing numbers of private individuals are putting their money into German homes, with investors spending 12% more last year which equates to sales of €7.5 billion. Jacob Volckerts, head of investment advisory services at CB Richard Ellis in Germany thinks this figure may increase to €8.2 billion this year.
Although investment percentages are increasing, the returns are steady as the average apartment has gained 1.9% in value this year, and overall prices have increased 7.4% since March 2009 according to the Hypoport Index.
In contrast to many other markets around the world, apartment prices in Germany fell by around 5% in the four years before the credit crisis, but after the fourth quarter of 2008 which is when the Lehman Bros Holdings Inc. failed, prices declined just 0.7% compared to a year earlier. This is drastically different to the 15% decline suffered in the UK, the 12% decline in the US and the 9.1% decline of property values in Ireland.
In general property prices in Germany have remained stable over the last 25 years, and this is partially due to the fact that rent controls make buying a less attractive option. The average percentage of home owners in the European Union is 65%, compared to just 43% in Germany but it's estimated this figure could rise to 47% by 2020. According to property market researcher Bulwien Gesa AG, the economic crisis had a barely discernible effect on the German property market.
View property for sale in Germany
Written by Les Calvert
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