Real estate investors in Germany are trapped between two opposing trends

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Real estate investors in Germany are trapped between two opposing trends

Posted by Tanya Yujelevski on 03/03/2019
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Real estate Investors in Germany. In case you are interested in investing in Dubai real estate, then feel free to connect with Dubai real estate professionals. For more details, visit our website!

While Berliners are pushing for a referendum to lower rents, investors are in no hurry to leave the market

On the one hand, trends in the global economy indirectly lead to the fact that the annual interest rates remain low. And the financing conditions in Germany are very attractive.

On the other hand, residents continue to try to apply pressure against large companies. The ones that own a considerable number of housing units in order to ease the rent burden. This is due to significant increases in rental prices throughout the country.

Recently, it has become increasingly difficult to ignore the atmosphere of a trade war hovering over Washington and Beijing. This has a great impact on the world economy. And Germany is no exception in this respect. In the current situation, many international giants are experiencing new restrictions. Such as imposing a customs duty of 25%, fearing the immediate future. And therefore exercising more caution in other arenas.

This could mean that existing agreements or future transactions will not materialize. It is a matter of time before Germany, as a giant exporter of machinery and industry, will feel the consequences.

Accordingly, many economists are forced to change their prognosis for the coming year for Germany. The stock market in Germany took this into account. And for a time real estate stocks experienced a certain decline. But since then they have strengthened and returned to the upward trend. The ECB had to change its forecasts so abruptly downwards. It probably will not raise interest rates quickly.

Real estate Investors in Germany

In contrast to this positive trend for German real estate investors, there is a trend that is rapidly gaining momentum. The local tenants are unwilling to remain silent in the face of the drastic rise in prices in the real estate market. And therefore call on the government to intervene.

According to them, tools designed to protect consumers in Germany are no longer enough, so waves of protest have recently swept cities such as Berlin, Frankfurt and Munich.

The main call is heard against the huge companies in Germany that hold large amounts of apartments and do not allow the lowering of housing prices, and the request to the government is to return to its ownership apartments from companies that hold more than 3000 housing units. Public unrest in recent months has reached a level where politicians find it difficult to ignore it, which could hurt the giant companies including Deutsche Wohnen, Vonovia and Akelius, whose common market share is 33 billion euros.

Therefore, with the relatively optimistic forecast in the area of interest rates, consider that today’s public resistance is ready to defend its rights.

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