Germany- any tips on whats the best city

P

paddy007

Guest
Hi

Can any one help me decide which city in germany would be best for buying an apartment, ive heard a lot about berlin but someone told me that there may be over supply, another city I have been looking at is Frankfurt;

any ideas?
 
Frankfurt is much better than Berlin, although much of the Irish money is (unwisely in my view) going to Berlin.

Frankfurt, Munich, Heidelberg, are good solid areas with steady returns for investors. Stick around there and you will do ok. Stay out of the former East Germany, including Berlin, Dresden etc.
 
Good afternoon. I went over to Berlin to view some property last year January and it seemed very good value. The major investment locations include mostly the metropolitan areas as Frankfurt, Munich, Dusseldorf, Stuttgart, Berlin, Hamburg, Dresden and Leipzig. Frankfurt, Munich and Hamburg would be considered some of the lower risk investment locations while investors speculating in areas for higher potential returns have mainly focussed on Berlin or smaller locations such as Rostock. Also note that property values in Frankfurt for example is higher than Berlin and the rental yields slightly lower.

I would say though that Berlin is very dull and does not appear as vibrant as Budapest for example. Having said this- brilliant and crazy night life!
I viewed properties in the Western areas around the lakes where a lot of the big industries are located.

There is indeed a large supply of buildings- this was as a result of tax breaks that was given to developers following the fall of the Berlin wall to create better quality housing in the poorer Eastern parts- unfortunately mass migration to the west of the country and in Berlin of people looking for better employment has left many buildings empty.

The theory behind why Berlin is that many believe big firms may re-locate to the city due to the fact that the wages are much lower than in other major cities, it certainly has good infrastructure and can accommodate such a shift. Secondly, owner occupancy levels are about 13% in Berlin in comparison with 43% in the rest of the country. There is also another airport opening that is forecasted to generate 100,000 jobs in the next few years.

A German property investment certainly offers potential, the only negative aspects I suppose is the low LTV mortgages of 60%, which is not ideal for leveraging and the high taxes. Lastly, the tenancy laws are very much in favor of the tenants and you should get aquanted with these.

What type of investment are you looking. Commercial or residential?

If you know what street the property is on I can assist you by giving the average price and average rental income for that particular location.
 
I can tell you what I ve observed . The balls in your court.

Frankfurt is a small city which is very seedy at the train station with drug addicts shooting up on the stairs of the (Hauptbahnhof) main train/metro station regularly sighted by myself.
As a place to live in, I would choose Berlin over Frankfurt any day. Theres not that much to do in Frankfurt and with the American army bases close by due to close down and relocate to eastern europe, the Saxehhausen Area ( Frankfurts version of Temple bar) has become like a ghost town even on weekends. But if you can get tenants then you are doing fine.

However, in Germany most people rent so how is there an oversupply in Berlin ? are they building more units than they are renting ? can you back those figures up or is it just unsubstantiated rumour?
Doesnt a really hgh percentage of the population of Berlin rent in any case ?

Heidelberg is a small but beautiful town with an amazing castle which has to be seen to be believed and a large student population however with regard to renting to students I think many universitys in Germany have student accomodation already on offer for about 50 euro a week per room so maybe its hard to compete with that.
 
Hi Auto

thanks for that, i will be careful about Berlin
 
Zulu said:
Good afternoon. I went over to Berlin to view some property last year January and it seemed very good value. The major investment locations include mostly the metropolitan areas as Frankfurt, Munich, Dusseldorf, Stuttgart, Berlin, Hamburg, Dresden and Leipzig. Frankfurt, Munich and Hamburg would be considered some of the lower risk investment locations while investors speculating in areas for higher potential returns have mainly focussed on Berlin or smaller locations such as Rostock. Also note that property values in Frankfurt for example is higher than Berlin and the rental yields slightly lower.

I would say though that Berlin is very dull and does not appear as vibrant as Budapest for example. Having said this- brilliant and crazy night life!
I viewed properties in the Western areas around the lakes where a lot of the big industries are located.

There is indeed a large supply of buildings- this was as a result of tax breaks that was given to developers following the fall of the Berlin wall to create better quality housing in the poorer Eastern parts- unfortunately mass migration to the west of the country and in Berlin of people looking for better employment has left many buildings empty.

The theory behind why Berlin is that many believe big firms may re-locate to the city due to the fact that the wages are much lower than in other major cities, it certainly has good infrastructure and can accommodate such a shift. Secondly, owner occupancy levels are about 13% in Berlin in comparison with 43% in the rest of the country. There is also another airport opening that is forecasted to generate 100,000 jobs in the next few years.

A German property investment certainly offers potential, the only negative aspects I suppose is the low LTV mortgages of 60%, which is not ideal for leveraging and the high taxes. Lastly, the tenancy laws are very much in favor of the tenants and you should get aquanted with these.

What type of investment are you looking. Commercial or residential?

If you know what street the property is on I can assist you by giving the average price and average rental income for that particular location.
Click to expand...
 
I was thinking residential, i presume commercial would be quite expensive

id be looking to have a deposit of about €40-60k
 
paddy007 said:
I was thinking residential, i presume commercial would be quite expensive

id be looking to have a deposit of about €40-60k
Click to expand...

If you can get the financing (Total Value of €150,000) then you should have no problem buying something in one of the better neighbourhoods of Berlin.

Ideally in Berlin a 2-3 apartments on top of a shop looks to be a very attractive option however as you can imagine you will need a much higher budget. I viewed projects in the following locations: Charlottenburg, Spandau, Trepow, Reinickendorf. I also went to the East of the city and there is a good few possibilities- to be honest with you there is no point in talking about it - YOU SHOULD JUST FLY OVER and spend a week or so there. Also visit some of the rental agencies and ask their opinions.(Only those not selling).

I have seen some companies advertising properties (studios) for as low as 16,000 Euro with a guaranteed rental income- it was located in Rostock. Now, you are probably paying for what you are getting. Most of the cheaper properties are ex social housing with older tenants in them.

Best of luck with your German Venture
 
thanks a million, your advice is much appreciated,
 
sign said:
However, in Germany most people rent so how is there an oversupply in Berlin ? are they building more units than they are renting ? can you back those figures up or is it just unsubstantiated rumour?
Doesnt a really hgh percentage of the population of Berlin rent in any case ?
Click to expand...

Most of the cities in the east suffered depopulation after the wall came down.

e.g Dresden - the population in 1989 was about 650,000, now it is nearer to 500,000. This helps explain why there are empty apartments.

People from former East Berlin would have moved to western cities for employment. Unemployment is still high in the east.

Property in East Germany is also still subject to claims from former Jewish owners who were disposessed by the Nazis. The GDR did not give back these properties, unlike West Germany, so it was not until the 1990s that these claims could be made.
 
I have visited Berlin on 3 occassions this year. The city is very vibrant with many theatres, parks, zoos, museums, etc. It is very clean and generally speaking Berliners are very friendly and most speak good English. The night life is 'special' - clubs, bars, music venues, 'other venues'. Everything goes and nothing appears over commercial or seedy. Even if you never buy property there I would recommend everyone to visit there. It has something for families, clubbers, culture freaks and architecture and history buffs. Unemployment is a problem but is improving with new jobs being created all of the time. Many companies moving their bases there. The German economy has shown growth over the last 2 years. Property can be bought in bad areas (i.e. parts of Wedding, Kreusberg, Templhoff) for anything from €650 per square mettre. Average areas (i.e. Spandau, Charlottenberg) from €1,000 per square metre. Good areas (Prenzlaurberg, Mitte) from €2,500 per square metre. City Centre from €3,500 square metre. Dont buy until you research and visit as all good areas have also bad streets and all bad areas have good streets.
 
I ve been in Berlin twice in the last year and I second everything simplyjoe said. Its a nice city to live in. Whether its the right investment location is for you to decide conditional on finding the right property.
 
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