Investing in the city

איפה כדאי לקנות דירה להשקעה

Elderly housing: a real estate market in Germany that hasn’t been fully explored

The population in Germany is growing older. This is due to a combination of factors such as low birth rate and improved medicine that is constantly improving life expectancy.

And while most of the retiring generation is living in their own housing being assisted by family members or professionals, 29% of them (as of 2013) are moving to specialized nursing homes. In addition to that, the socio-economic status of the currently-retiring population creates a previously unexplored demand for more luxurious housing.

The baby boomers generation born in Germany between 1955 and 1969, and it currently constitutes the population segment that drives the demand for better solutions for elderly housing. This generation grew up during the post-war economic expansion and it has been raised on values of individualism and self-reliance, and as a result they are considered to be relatively well off in terms of finances.

Therefore, in case they opt for assisted living facilities instead of an at-home solution, they are able to afford a more luxurious option that is currently quite scarce on the German real estate market.

Investors tend to rely on payments from German insurance companies for building such housing since it is very reliable and easily predicted. When, however, an elderly housing complex offers more services and amenities than required by law, it is up to the customers to pay for those extras and the investors are fearing the risk.

At the same time the demand for such facilities continues to grow, creating a gap in the market that has not been filled yet due to reluctance of both German and international real estate investors. Thus, it might be a good time to keep up with the demand and offer a more varied supply of elderly housing in Germany.

Posted by Tanya Yujelevski  |  0 Comment  |  in Berlin, Investing in the city

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