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Germany. Good overseas investment
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MichaelDes
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Devoto,
Management companies are as important as the properties themselves and it would be the Achilles heal to have a good property managed by some half wit. There are unfortunately loads of them everywhere. All we can do is put out the post "Does anyone know any good management companies in Germany" I got a lot of contacts through Irish EAs selling property there, a lot are based in Germany full time and know the good from the bad. Search Germany property through www.Daft.ie then just ring up and enquire. It is so important to go out at least 2 to 3 times before committing to any property or picking an agency.
Quite a few of those properties on daft.ie give the name Des as a contact. Any relation?
Someone earlier in the thread mentioned hedge funds selling German property - I think they were referring to Fortress which has sold some property recently.
MichaelDes
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Unfortunately not. No cheaper commissions.?
MichaelDes
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Why did Fortress sell? Are they a big player? Was it for a liquidity?
I think that they got in years ago and are now getting out having made a nice profit. In addition, there are growing signs that the German economy is slowing. Whether this is a temporary blip brought on by the credit crunch and a strong euro or start of a more sustained slowdown is impossible to tell at this stage.
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it's giving off mixed signals at the least.
Retail sales are down on last month and last year according to figures released today.
http://www.rte.ie/business/2007/0928/germany.html
Inflation is up.
But, as you say, unemployment is down. There may also be a mini-building-boom in some of the cities in the East, partly due to the reunification taxes and e.g. property renovations in Berlin.
There is an interesting report in the ft about how the south of Germany is the wealthier part, or will be in the future, rather than the west.
http://www.ft.com/cms/s/0/78a96db0-6207-11dc-bdf6-0000779fd2ac.html
MichaelDes
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FT has different articles every week so you can not rely on just one of its jounalists for accuracy. Last week FT gave a large editorial and glowing report on Hamburg. It's as northerly as you can get. It is a huge port doing extreme volumes of the export/import stuff. Financial journalists differ significantly even within certain papers, everything in the future is supposition.
The benchmark ZEW & IFO economic & business sentiment surveys have been weaker than expected for at least the last three months. Industrial production & factory orders recorded surprisingly sharp drops in July. To boot a profit warning from a German residential mortgage lender (Interhyp) in early September suggests that this part of the economy is slowing too. There is also evidence from some building supply firms that demand is slowing in the home DIY market (I work for a fund management company and this is what we have heard from two European companies that operate in Germany).
I appreciate that none of this means that property is either a good or bad investment in Germany as a whole as I am sure that there is a huge amount of regional variation when it comes to property.
MichaelDes
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JohnBoy(I work for a fund management company and this is what we have heard from two European companies that operate in Germany).I appreciate that none of this means that property is either a good or bad investment in Germany as a whole as I am sure that there is a huge amount of regional variation when it comes to property.[/quote said:
I am no expert by any stretch but when I look at the places people are investing I see (in some cases) very little by way of fundamental reasons to invest in a country (bad roads, obscure languages, rife corruption). With Germany I see the best transport infrastructure in the world, slap bang in the middle of Europe, with stable politics and low corruption. On the downside would appear to be what? cost of labour and restrictive labour laws? High pensions burden?
I also believe that as more germans experience life outside Germany in 'anglo-saxon' countries they will see that buying one's own home is actually often a good idea and they will put more pressure on german banks to lend more than 60%.
I'd never consider germany (or any property really) for a 'quick buck'. Long term I think Germany will be a good bet. They have something in them that other people don't.
I also believe that as more germans experience life outside Germany in 'anglo-saxon' countries they will see that buying one's own home is actually often a good idea and they will put more pressure on german banks to lend more than 60%.
I'd never consider germany (or any property really) for a 'quick buck'. Long term I think Germany will be a good bet. They have something in them that other people don't.
MichaelDes
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Murphaph,
It beats the pants long term out of Bransko, Dubai, and Budapest etc that many seem to follow with the crowd. Germany is a long term play and I hope it works. I've stuff there for 2 years and easily washing their faces as far as paying their way.
Can't say the same about other investments area's from the Southern Med states plus the above types too. Not convinced long term with these Eastern States that are rocketing, could fall as quick as they rise. There is no fundamentals to rely on. Once had an email from Property Frontiers to invest in Outer Mongolia - Ulaanbaatar. Population 2.3m and average per capita income $2300. Chase the miner boom in commodities and rent to rich Ex-pats. Some fools etc would have fallen for it - likewise for many other daft destinations being marketed. What has been the madest destination to be touted? Don't say Germany!
If you click on the link http://www.ft.com/cms/s/0/78a96db0-6207-11dc-bdf6-0000779fd2ac.html and go to the map you will see Hamburg is one of two areas in the north with less than 6% unemployment - compared with basically all of the southernmost 25% of the country.
There are also some fast-growing areas of the east pointed up in the article.
I dunno, as I pointed out in another thread, Germans love renting so much they even rent their graves.
Anyway, with Europe becoming more of a single market in finance, it might sometime be possible to get a mortgage from a bank in one country for a property in another.
right, here's my tuppence-hapenny's worth on the German property market:
I am German-born and have recently bought - for very little money - an appartment in Nuernberg, the second city of the southern state of Bavaria. Planning to use it myself when visiting the family and not particularly interested in profit.
Everybody in Germany seems to think this is a sure way to lose money, and seems to be told by their financial advisers to stay away from property. Having said that, everybody I know owns a house or two, and all my friends' and family's children already have houses earmarked for them to inherit. There is no property ladder, no pressure to buy in the young, and rents are cheap. Based on my own observations, I have never bought all this 'Germans tend to rent rather than buy' business. What skews those statistics is the fact that most Germans will rent through their 30s and often 40s while they save to build a house or until they inherit from their families. It is also very common for people to rent the home they live in while they may own one or more other properties, such as a family home they have inherited and are reluctant to sell. I personally know several people in this situation, all showing up as renters in the official statistics.
Population is falling in Germany - especially in the east - so it would seem that there will be more and more properties for fewer and fewer people. Rather incongruously, there is still a lot of housebuilding going on, while at the same time I see a lot of empty flats in older buildings around the cities. There has been discussion in the press here lately about the fairly revolutionary concept of 'Rueckbau' (pulling down) of dwellings and infrastructure in the East because of depopulation.
The American property fund Cerberus pulled out of Berlin around June or July I think. Went through the press at the time. Look up 'Cerberus' and 'Berlin'.
There was a short-lived property boom in the early nineties, which a lot of people lost money in when it fizzled out; other than that there is a whole generation of people who have never seen property prices rise. And Germans are a pessimistic lot to boot.
AS is pretty obvious by now, I don't expect the German property market to go anywhere much. I don't particurlarly expect it to fall either, seeing as it hasn't gone up for ages. The rich southern states of Bavaria and Baden Wuerttenberg will probably keep doing well and continue to have inward migration, so will probably offer the best prospects, as will places like Frankfurt, Hamburg, and other large cities in the West. The East is probably pretty dodgy with the possible exception of a few cities. On the whole, no quick bucks are likely to be made in property here, which is the way Germans think it should be...
I am German-born and have recently bought - for very little money - an appartment in Nuernberg, the second city of the southern state of Bavaria. Planning to use it myself when visiting the family and not particularly interested in profit.
Everybody in Germany seems to think this is a sure way to lose money, and seems to be told by their financial advisers to stay away from property. Having said that, everybody I know owns a house or two, and all my friends' and family's children already have houses earmarked for them to inherit. There is no property ladder, no pressure to buy in the young, and rents are cheap. Based on my own observations, I have never bought all this 'Germans tend to rent rather than buy' business. What skews those statistics is the fact that most Germans will rent through their 30s and often 40s while they save to build a house or until they inherit from their families. It is also very common for people to rent the home they live in while they may own one or more other properties, such as a family home they have inherited and are reluctant to sell. I personally know several people in this situation, all showing up as renters in the official statistics.
Population is falling in Germany - especially in the east - so it would seem that there will be more and more properties for fewer and fewer people. Rather incongruously, there is still a lot of housebuilding going on, while at the same time I see a lot of empty flats in older buildings around the cities. There has been discussion in the press here lately about the fairly revolutionary concept of 'Rueckbau' (pulling down) of dwellings and infrastructure in the East because of depopulation.
The American property fund Cerberus pulled out of Berlin around June or July I think. Went through the press at the time. Look up 'Cerberus' and 'Berlin'.
There was a short-lived property boom in the early nineties, which a lot of people lost money in when it fizzled out; other than that there is a whole generation of people who have never seen property prices rise. And Germans are a pessimistic lot to boot.
AS is pretty obvious by now, I don't expect the German property market to go anywhere much. I don't particurlarly expect it to fall either, seeing as it hasn't gone up for ages. The rich southern states of Bavaria and Baden Wuerttenberg will probably keep doing well and continue to have inward migration, so will probably offer the best prospects, as will places like Frankfurt, Hamburg, and other large cities in the West. The East is probably pretty dodgy with the possible exception of a few cities. On the whole, no quick bucks are likely to be made in property here, which is the way Germans think it should be...
that's what I believe caused the property boom in the early 90s - lots of Westerners thought prices would equalise quickly and paid western prices for eastern properties and prices have not really gone anywhere since.
I'd disagree with Alamanda about population falling in the East - there was a lot of depopulation since the wall came down but some of the cities in the East have increasing populations. Many smaller towns and villages however do have old and aging populations. Look at the graph for Nerchau:
There was a housing boom and crash in Germany way back in the 1870s or so, perhaps this has entered their national psyche like inflation did after WW1.