German apartment prices have increased by 23% in 5 yrs
While other countries around Europe continue to feel the negative effects of the Eurozone crisis, Germany’s economy is still bucking the trends.
Further confirmation of this has just come to light with the announcement that values for apartments in the country have risen by 23% in the last five years.
The new report from BulwienGesa shows that the property market has benefited from low unemployment, rising construction rates and increases in rental costs.
The figures are set against the backdrop of only 53% of Germans owning their homes, compared to 70% in the UK and 72% in Italy. The rental sector in Germany is now worth £890 billion and rental rates have increased by 15% over the last five years.
The situation is in stark contrast to the ongoing property market woes in Spain and Portugal and the number of other European countries whose economies are in the throes of double or triple-dip recessions. In fact, apartment prices across the rest of Europe have on average dropped by 3.7% over the same period.
Property researchers Savills point out that Germany drew in over a fifth of the overall investment in Europe last year.
Investment firm Knight Knox International said: “The rise in construction rates has enabled an increasing number of investors to enter into the market as product availability snowballs.
“Berlin, which was once the most divided city in the nation has fittingly reaped the rewards of this property boom as rents in the city, which once served both communist and capitalist interests, have risen by 32% in the past five years as a result of Berlin’s growing population, which has increased by nearly 100,000 since 2007.”
It is estimated that 30,000 people are moving into Berlin every year and as only 4,000 apartments are currently being built in the city there will be an annual shortage of 15,000 units. In classic supply and demand circumstances, a rental rise of over 8.1% has been seen in Berlin and the trend is likely to continue for years.
If you want to buy property in Germany it is worth spending the time finding the cheapest way to send money abroad. Exchange rates from currency exchange specialists are usually more competitive than those offered by banks.