AS there have been a few mentions of Germany in the "Current public sentiment towards the (Irish) housing market", I thought it might be interesting to split this off into another thread.
Some of the background economics:
As far as I understand it, prices have dropped in the past 15 years. After the Wall came down there was a flood of investment from the west as people expected property prices to become pretty much similar to Western German prices.
There was also a huge splurge of building commercial property in the early 90´s due to massive tax breaks put in place to facilitate the improvement of the infrastructure here. There may have been an expectation that German companies would move their headquarters from the West to the East to take advantage of lower wages, lower rents etc. but this has not happened.
There is a tax charged on payrolls for the cost of reunification i.e. transfer payments from West to East. The transport minister Wolfgang Tiefensee, himself from the east, has recently talked about splitting this into two streams - one for those areas that are suffering from declining population would be to maintain living standards in those areas and the other, in the 19 areas and cities of the east that are experiencing population growth would pay for infrastructure and capital investment to make those areas more attractive. (Assuming I´ve correctly understood the article that was written in German).
There is an new underground train link being built near where I live and the local airport is being upgraded and I´ve seen some big roads being built so they´re not spending all the money on pointless job creation schemes.
Unemployment is persistently high in eastern Germany. The official government figure for Germany as a whole is 10.5% but this includes some part-time workers. Using EU or international figures, the rate may be nearer to 9%. Something like 1 in 4 over-50´s are unemployed.
Inflation is running at an annualised 1.9% according to the latest monthly figures. Note that an a VAT increase of 3% to 19% will probably add to consumer prices next year.
There was a lot of talk about yields in the other thread, and I would guess that they are higher here. However there are also very many empty apartments. There are estimated to be at least half a million vacant apartments across the former east Germany. There are also very many buildings that are falling into disrepair, something that you don´t really see back in the old country. There is a problem with grafitti on buildings, including on older buildings with listed or protected decor - in this case I assume the landlord would probably have to pay to have them cleaned.
I´m living and working in the former East Germany and I rent an apartment.
Some of the background economics:
As far as I understand it, prices have dropped in the past 15 years. After the Wall came down there was a flood of investment from the west as people expected property prices to become pretty much similar to Western German prices.
There was also a huge splurge of building commercial property in the early 90´s due to massive tax breaks put in place to facilitate the improvement of the infrastructure here. There may have been an expectation that German companies would move their headquarters from the West to the East to take advantage of lower wages, lower rents etc. but this has not happened.
There is a tax charged on payrolls for the cost of reunification i.e. transfer payments from West to East. The transport minister Wolfgang Tiefensee, himself from the east, has recently talked about splitting this into two streams - one for those areas that are suffering from declining population would be to maintain living standards in those areas and the other, in the 19 areas and cities of the east that are experiencing population growth would pay for infrastructure and capital investment to make those areas more attractive. (Assuming I´ve correctly understood the article that was written in German).
There is an new underground train link being built near where I live and the local airport is being upgraded and I´ve seen some big roads being built so they´re not spending all the money on pointless job creation schemes.
Unemployment is persistently high in eastern Germany. The official government figure for Germany as a whole is 10.5% but this includes some part-time workers. Using EU or international figures, the rate may be nearer to 9%. Something like 1 in 4 over-50´s are unemployed.
Inflation is running at an annualised 1.9% according to the latest monthly figures. Note that an a VAT increase of 3% to 19% will probably add to consumer prices next year.
There was a lot of talk about yields in the other thread, and I would guess that they are higher here. However there are also very many empty apartments. There are estimated to be at least half a million vacant apartments across the former east Germany. There are also very many buildings that are falling into disrepair, something that you don´t really see back in the old country. There is a problem with grafitti on buildings, including on older buildings with listed or protected decor - in this case I assume the landlord would probably have to pay to have them cleaned.
I´m living and working in the former East Germany and I rent an apartment.