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Investing in Real Estate in Berlin
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Investing in Real Estate in Berlin
Investing in real estate in Berlin is a great idea for people who want to take advantage of the current housing market in the city.
Demand will exceed supply
Investing in real estate in Berlin is considered a haven. A study by PwC ranked the German property market as the best in Europe. In fact, Berlin edged out Paris and London in its ranking.
According to the research, German property prices are undervalued by 20%. This could mean that the market is setting itself up for a bubble. The study also indicates that there is a shortage of housing in Berlin. This will continue to determine the market in the medium term.
Berlin’s population increased by 144,057 inhabitants between 2015 and 2020. This has led to the number of rented flats in the city decreasing slightly over the same period. In the meantime, demand for housing is increasing steadily. In this environment, vacancy will rise, and rental growth will slow down.
The construction industry is struggling due to material shortages. This has resulted in an increase in service charges. These factors are leading to the revival of long-forgotten price drivers.
Rental yields are low compared to other cities
Investing in Real Estate
Despite being home to about 4 million people and a slew of techies and execs sprucing up the city, the capital is lacking a lustre. A lack of affordable housing is a real pain in the neck and has been a dampener for some quarters. A flurry of multi-million-dollar investment projects is helping to ease the pain. In fact, a recent study by the city’s chamber of commerce estimates that as many as a half million people are considering moving to the city over the next several months. Some tens of thousands are already on the move. Some have relocated to Berlin from other German cities such as Bonn and Stuttgart.
In short, the most efficient route from train to office and back again if you are lucky enough to have a family member to fall back on. If you are looking for a swanky new apartment or are relocating to Berlin for work, you may want to consider the posh parts of town.
German law is particularly tenant-friendly
Despite a housing crisis after World War II, Germans have continued to rent rather than purchase. As a result, the country’s rental market is a good one for tenants. But there are a few things you should know before moving to Germany.
First, the rental industry is a very competitive one. You may have to take a bit of time researching your options before you decide. The best place to start is your local tenant association. They will have rental statistics for your area. They can also offer you legal advice.
Second, there are a few things you need to know about the laws of real estate in Germany. You should understand that a rental contract is not as tightly bound to your home as a mortgage. For example, you can not deduct your mortgage interest from your rental payments. You can not modify your apartment without the landlord’s permission.
Property availability is on the up
Investing in Real Estate
Buying or renting property in Berlin is now becoming cheaper and more available. Several foreign investment companies are taking advantage of cheap German property to snap up large amounts of the city’s real estate.
The price development in the Berlin housing market has been substantial. However, it has not been as pronounced as in the past ten years. This is largely due to the general mood of the economy and inflation. In addition, service charges and interest rate developments are also affecting property prices.
As demand for new properties increases, the supply of apartments continues to be limited. This has led to a shortage of available property in Berlin. The shortages are not just in the city Center, but also in the areas surrounding the capital affecting the investing in real estate.
The vacancy rate in Berlin is currently at 0.8 percent. This means that there is a high level of competition for apartment spaces, making it difficult for potential tenants to find an apartment.
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