german property prices rising rapidly
News Posted On: 30 June 2011
Property prices in Germany are increasing rapidly, with prices up 17% in Berlin and 15% in Frankfurt. It’s thought that this is due to a drop in construction, and increased housing demands as the German economy continues to surge forward.
Middle class families are becoming wealthier, and this is leading to increased demand for single family homes, even though the population is actually shrinking. Building permits for single family homes have dropped by 36%v in the last five years, and supplies are at an all-time low.
This lack of housing has led to cities outside these two major areas becoming more popular. Potsdam is located just seventeen miles outside Berlin and property prices here are increasing rapidly. The average family home here costs 406,000 euros, and some experts are forecasting price increases of up to 41% by 2020. However rental yields are expected to continue to be modest, as national rent controls lock landlords into fixed rents for two year periods. Investors are advised to stick to the cities, where rents have increased by about 7% or 8% since 2009.
Latest reports indicate that consumer confidence in Germany is expected to continue recovering, and that there is a strong increase in income expectations amongst Germans as this index has risen from 25.9 to 44.6. The effect of this was to increase the propensity to buy index from 31.5 to 35.1. German business confidence also increased in June, for the first time since February. The German economy is the largest in Europe, and grew by 1.5% on a quarterly basis from January to March, which when adjusted annually equates to 4.9%.
View property for sale in Germany
Written by Les Calvert
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