Germany. Good overseas investment

dontaskme said:
http://www.ft.com/cms/s/0/f29aeeb8-6de8-11dc-b8ab-0000779fd2ac.html

You agree with the FT then. :)
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Very interesting article dontaskme - never came across that before. Disagree however with your assertion that Germans will continue to be a nation of renters. Rent controls being done away as explained. It no longer be a cheaper alternative to rent in the near future. It will be a huge shift in psyche and probably occur over a period of time, possibly 15 years (however nation of renters ideal if you want to rent your property). Stuck to commercial because of 15 year time line, towards good capital appreciation.


Alamanda - very interesting insight, thankyou for your contribution into what is effectively your own market, it seems bang on the money. But as mentioned its a 10 to 15 year play in residential and a less than 10 year one for commercial. Fingers crossed!
 
MichaelDes said:
Stuck to commercial because of 15 year time line, towards good capital appreciation
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One of the agents I spoke to made an interesting point I hadn't really thought about before as I'm looking to buy a flat to live in, not particularly as an investment though hopefully it will be both. He said "commercial gives higher yields per sq m but is riskier becuase you're depending on yer man's business to stay afloat or the place could be vacant whereas residential tenants always need somewhere to live, regardless of their financial situation". Obviously this is a gross simplification of the state of play but an interesting avenue for discussion I feel.
 
I've spent some time in Germany, and Alamanda's contribution is spot-on IMHO. The east is being depopulated and it is really only the largest cities like Dresden and Leipzig that are seing significant population increases. Plenty of medium sized towns/cities are experiencing population decreases. And this is the reason why the mini-boom in the early 90's fizzled out. There were no renters for all this new property, and those that did exist weren't prepared to pay a high enough rent to make the investment economical for landlords.

Also, it's a myth that banks only offer loans up to 60% of the property. There are plenty of banks offering 80% mortgages and some even offering 90%. However I'm not sure if this is also for investors, or just for owner occupiers. I was over there recently and say a list in the paper of the rates of each bank and max %age mortgage offered.
 
Hi, I was speaking with a broker today who told me that as a foreigner not resident in Germany i could get 60% mortgage, but that if i currently lived in Germany (min 6 months) i would get more than that.
 
Interesting. I took a look at the Hypovereinsbank website and it reckons 80% is doable now, though the information is buried in a pdf. Maybe the tide is turning....

I don't know whether or not the ambition to own one's own home will become more prevalent. If it does it bodes well for capital appreciation, if not, maybe the yields will stay strong.

Worth a punt methinks.
 
Interesting article. Daimler say the building is surplus to requirements. You'd have to wonder why they ever though they'd need such a big office in Berlin when they're based down in Stuttgart - the other end of the country.

I remember reading about Washington DC, and how just down the road from the government, there were loads of ghettos, serious crack cocaine problem etc. Don't know how much exageration was there. But I think Berlin could be heading in a similar direction. Government is based there, and some tourism, but not much else going for it.

Outside of the tourist attractions, it is an incredibly cheap city for practically all living expenses. But this is by Irish standards, the average wage (if you're not one of the 20% unemployed) is also very low.
 
In relation to Berlin and/or Dresden, does anyone know the following:

- I understand there is a tax agreement with Germany: can anyone confirm that that definately mean if you pay your tax there, you will not have to pay it again in Ireland
- Can anyone recommend a good local estate agent over there?
- Can anyone recommend a bank that will generally offer more than 60% mortgage to foreign investors?

Been thinking about there for a while and plan a info gathering visit in the next few months so anything would be welcome.

Thanks
 
Persius said:
Outside of the tourist attractions, it is an incredibly cheap city for practically all living expenses. But this is by Irish standards, the average wage (if you're not one of the 20% unemployed) is also very low.
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Berlin in my opinion is not the sexiest place for commercial investment in Germany but it is still sexy. Notwithstanding the above article, there is so much FDI going in to the city (not from gifted amateur investors or companies), along with the government departments, many of which have to leave Bonn and will add millions to the local economy through a multiplier effect. In 2000 Germany fizzled out before - I do not think so this time and I'll explain why.

Berlin Brandenburg airport is being extended and presently handles 17.2m compared to Frankfurt at 52m. After the €500m refurbishment is completed, passager traffic will significantly increase , allowing the city to become an international hub and tourist destination (put Dublin to shame) - this will suit and attract commerce. Also the completion of the rail terminal within the city having major links in the ICE network and beyond allows the city to have the entire, excellent infrastructure in place. Excellent infrastructure, productive workers, expanding economy, cheap destination means there are very good prospects for commerce.

I would not hold Daimler or Sony up as beacons of international property development; they probably spent too much money on the fitting of their palaces without realising the implication...probably a reminder of the 3G auction sale in the UK a few years ago with companies losing the run of themselves. ;)
 
The euro is affecting exports and the consumer spending for some reason is not happening, dropped last month on the worries of rising prices (worried about strikes from restrictive unions operating in the country - governemt hold it nerve hopefully) - see http://www.ft.com/cms/s/0/2d2aa4b4-6e1c-11dc-b8ab-0000779fd2ac.html . However, as long as rents self finance it is a no brainer, other countries will be worse hit. IFT - trains in my opinion will be the point to point carrier in the future, as an island nation we have to fly. Europe is a small place on an intercity express and Berlin and for that matter Germany has excellent infrastructure, roads etc to take advantage. It's a 10 year play.
 
Indeed I've just returned from Berlin on a 'reccie' mission and I was thoroughly impressed and I'm not that easily impressed-I've been all of the world on transit networks but Berlin was right at the top.

The main station (Hauptbahnhof) would put us to shame. An amazing structure of glass and steel on three levels, one underground.

I disagree with the artcle about Potsdamer Platz having no character. I found it a great spot for a meal and a drink, at reasonable cost. It's still a bit of a gamble, but one has to speculate to accumulate as they say!
 
murphaph said:
Indeed I've just returned from Berlin on a 'reccie' mission
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Good to hear murphaph.....is there much tourism activity.......is the new Airport near completion...? Could'nt remember the name of the Station completed at time of World Cup..last minute finished job. But it puts us to shame with our inferior 2020 plan.
 
MichaelDes said:
Good to hear murphaph.....is there much tourism activity.......is the new Airport near completion...? Could'nt remember the name of the Station completed at time of World Cup..last minute finished job. But it puts us to shame with our inferior 2020 plan.
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No start on the airport as far as I could see. I did look for signs of work but they weren't there. Personally I believe Tegel will remain open for a few more years than the city is suggesting. Templehof is as good as closed already though I saw a handful of business jets take off from there.

The airport might be waiting to see the completion of the A113 works which will see the current gap closed and allow a direct motorway connection from southeast Berlin to Dresden (A100->A113->A13). The works pass through the airport lands and were originally supposed to be in a tunnel but I believe will now run on the surface and the runways will be relocated.

From my research on BBI, it looks very similar to the Strauss Airport in Munich which is a dream to use and has high hopes for hub status, targetting Frankfurt directly. BBI wants a piece if that action.

One thing struck me as I made my first change on the U-Bahn at Warschauer Strasse (Warsaw Street) was how close Berlin is to Poland. If we are to believe the stories that Poland is set to boom, it's conceivable that Berlin might benefit also. A LOT of poles head to Berlin to shop at xmas time as the selection is so much greater and remember, Berlin is about 40 miles from the border, Warsaw is set in eastern Poland. The natural place for people to go is Berlin. Maybe. The motorway reaches all the way to the border of course!

It was hard to judge the tourism aspect MD as I chose the day of national unity (Tag der Deutschen Einheit) to visit and I already knew that germans from the 'provinces' make their way to Berlin for the festivities (and they put on a great show along the Strasse des 17. Juni (right in front of the Brandenburg Gate) with tens of thousands attending the free concerts/fireworks etc.

I found Berlin to be more 'citylike' than any other city I'd been in Germany, more gritty and a litte scruffy. I found areas I would not buy in. I found little gems too though and I'm going to make an offer on a place.
 
Warsaw 340 miles away by Autobahn then onto A2 dual carriageway. Though 90 miles or so of the road on a fairly crap Class A road - maybe improved now. Can't see the critical mass of Poland with Belarus, Lithuania, Slovakia and Ukraine as neighbors. Would prefer in no particular order Luxemburg, Netherlands, Belgium, France, Czech, Austria, Italy, Switzerland and France...sounds a bit better..:rolleyes: Correct my geography if it is not correct. P.S.Poles welcome to shop though.
 
I was in Berlin for May bank holiday w/end this yr & also in December last yr. Lots of tourist activity each time. May had beautiful weather & taxi drivers say tourism has increased a lot since the world cup. It seems that lots of football fans have returned for hols with wives/girlfriends/families in tow. Lovely places to visit just outside Berlin too like Wanzee (sp?) Potsdam & San Soucis. Somehow I didn't realise Berlin had such sights to see. Don't know where I got my negative ideas from !
December was fabulous with the Christmas markets. They really put on a show for Christmas with a kiddie ice-rink at Alexander platz & a ski slope on the Ku'damm. The market at Gendarmenmarkt is fabulous & the street decorations on Frederick Str.....I could go on...
A friend there was going on a day trip to Poland. She says it doesn't take long by train. Works visa-versa I presume.
 
I might be wrong but ... I personally think that current Irish property market cool down would have happened at least 3 years ago unless 200k Poles + some other CE blokes came after 1 May 2004 (me included).

Germans still block their market from CEE workers, I think it will last till 2009. Any guesses what will hapen after this date ? For me it's 300k - 500k prospective tenants by 2012.

Some figures:

Region of Silesia (South PL) - roughly 10 mln people, a lot of which have been working in Germany in 1980/90s or/and have families/friends already there.

Silesia is a historical part of Germany and many people actually speak German there, they're more likely to assimilate than Turks and Albanians ...

Berlin is around 3hrs from Wroclaw, 4,5 hrs from Katowice and 5,5hrs from Krakow by car on a new A4 motorway (M1 here looks like a joke in comparison).

Properties in Silesia already cost 1200 - 2000 E/sqm ...

Poland is about to join Shengen on 1st Jan 2008 (or even 15th Dec 07) meaning no border between PL and GER. To come to Ireland it takes to book an airplane ticket, drive to an airport, queue, fly, go through Irish customs and find oneself 3000km away with prices 4 times higher than at home, stuck on a rainy Island with no way of escape.

While to try your luck in Berlin cost 2 tanks of petrol and 10euro for motorway tools. You can even go back hitch - hiking.
 
polish_bloke said:
To come to Ireland it takes to book an airplane ticket, drive to an airport, queue, fly, go through Irish customs and find oneself 3000km away with prices 4 times higher than at home, stuck on a rainy Island with no way of escape.
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He-He.

WOuld I be correct in asuming you don't work for the irish tourist board then ? :)
 
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