Berlin or Munich, which is best to invest?

G

gus07

Guest
Hi,

I am doing a little research into foreign property at the moment and I was in contact with a company who will only sell property in Munich and Frankfurt. They obviosuly had their facts to back up the reason why not buy in Berlin. ie., higher unemployment, over saturation of appartments at the moment, but I also noticed that the property that they were selling in Munich was alot more expensive!!!

Can I get some expert advice from someone on this matter please?
Also, Are there are other areas in Europe where it is a good time to buy property? Any input on this matter would be appreciated!

Thanks in advance!

gus
 
Hi Gus,

First of all I never looked at Berlin/Munich, but I understand the following... Munich is the most expensive city in Germany, with good employment and high wages. Berlin has high unempoyment, and generally has lower wages. I would reckon Munich is more stable in price, but there are also chances for good returns.

Its a buyers market at the moment all over Germany. So if you go for it, drive a hard bargain and invest time... I'd say Stuttgart is comparable to Munich, to give you a reference point I saw an appt. there for 75k (incl. tax, solicitors etc.) and the rent wil be 480 per month excl. management fees and utility bills.

Also it is important to understand how the tax works, if you can't invest time or money in understanding the tax system your at a deffinite disadvantage from an investment point of view.

Darragh.

P.s. I don't claim to be an expert ;) just my two cents
 
Frankfurt is close to london as being europes financial capital,long term it may be good investment.
 
stay away from berlin...there may be opportunity there but theres no sight of it yet. Anyone investing in Berlin is taking a gamble imho
 
I'm not sure about the property market in Germany but heres soem info on teh states you mentioned. Berlin state/Brandenberg has huge debts which may be a factor long term, there is talk of a federal government bail out because of the cost of reunification and consturction. The southern states of Bavaria and BW have the highest employment levels, Munich, Stuttgart, Ingostad, the state of Hessen (Frankfurt) has one of the highest leaving Frankfurt out.
 
Hi there,

I don't get all the hype about investment opportunities in Germany.

Property prices in Berlin etc. may be low at the moment due to a number of factors but even if they rise, I cannot see the profit being realised that easily.

Germans do not tend to buy property - especially not in cities. They would usually buy a home in the country but rent in the city.

As far as I can tell, all of these syndicates that are cropping up are stating that there will be capital appreciation over the 5 or 10 years of the syndicate - but they fail to mention who is going to buy the property at that point - will it be more foreign investors or Germans(unlikely).

As well as that I do believe that the Berlin City Council still has a swathe of property in Berlin that it owns and plans to get rid of as soon as prices start to rise any bit, they need to hold onto it while prices are low so as not to make a loss.....will this not flood the property market in or around the same time as all of these syndicates start to mature??

Cheers
Kane
 
If you think the rental returns are good, then it may be worth investing in Germany. However don't expect much/any capital appreciation. The prices in Munich have been more or less stable for the last 10 to 15 years, and there are good reasons for this (to do with demographics, employment, the general economy, growth, mentality, tennancy laws etc).

I think Berlin prices have been pretty stable and perhaps falling over the last 15 years. Prices in many east german cities have definetly been falling as they are now experiencing depopulation.
 
gus07 said:
Hi,

I am doing a little research into foreign property at the moment and I was in contact with a company who will only sell property in Munich and Frankfurt. They obviosuly had their facts to back up the reason why not buy in Berlin. ie., higher unemployment, over saturation of appartments at the moment, but I also noticed that the property that they were selling in Munich was alot more expensive!!!

Can I get some expert advice from someone on this matter please?
Also, Are there are other areas in Europe where it is a good time to buy property? Any input on this matter would be appreciated!

Thanks in advance!
Click to expand...


Slovakia is a good market to go for in Europe. Germany particuarly Munich is very expensive with little room for Capital growth in the next 2 or 3 years. You will see a boom in Slovakia as soon as the British and Irish start taking note in numbers like they have in Bulgaria over the past 3 years. The tax system in SLovakia is simple and straight forward 19% flat rate and no CGT after 5 years of ownership of your property. BUy now and you will see 20% per annum for next 4 to 5 years.
 
icecool said:
Slovakia is a good market to go for in Europe. Germany particuarly Munich is very expensive with little room for Capital growth in the next 2 or 3 years. You will see a boom in Slovakia as soon as the British and Irish start taking note in numbers like they have in Bulgaria over the past 3 years. The tax system in SLovakia is simple and straight forward 19% flat rate and no CGT after 5 years of ownership of your property. BUy now and you will see 20% per annum for next 4 to 5 years.
Click to expand...

Do you have a vested interest in the Slovak market?
 
kane3000 said:
I don't get all the hype about investment opportunities in Germany.
Click to expand...

I think the interest in coming from the fact that you had get 6 to 7% rental yields and since the market is depressed the probability of capital appreciation is good.

Its following the very very simple investment rule : Buy low, sell high.
 
Persius said:
I think Berlin prices have been pretty stable and perhaps falling over the last 15 years. Prices in many east german cities have definetly been falling as they are now experiencing depopulation.
Click to expand...

There was a rush of investment and capital flows from the west to the east when the wall came down so there was a sudden spike in prices, but there has been little or no capital growth since then.

And the population is shrinking throughout much of the country, though probably a bit faster in the east:
http://www.bloomberg.com/apps/news?pid=20601100&sid=aE4AsqAh03Uw&refer=germany

"Baden-Wuerttemberg, Bavaria and the cities of Berlin and Hamburg were the only parts of Germany where the population rose last year. "
 
sorry what's the name of the company who deal with munich/frankfurt properties? everywhere seems to focus on berlin and id be looking at munich myself but cant seem to find much.
 
icecool said:
The tax system in SLovakia is simple and straight forward 19% flat rate and no CGT after 5 years of ownership of your property.
Click to expand...

Does Slovakia have a Double Tax Agreement with Ireland? Does it cover income tax and CGT for individuals? Does the Slovak tax paid exempt investors from any Irish tax liability?
 
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