Investment in Germany

Don't expect property to appreciate in specific cities.
You can look at specific states and municipal areas as being good bets but don't look at it as though if you pick specific city you are on to a winner.
Because of the Motorways you don't have to live in a particular City.
My German colleagues commute over 100KM each way each day out of choice.
I've got colleagues working in Walldorf who commute from Frankfurt, Stuttgart and beyond. Others live in villages maybe 30 or 40KM from work.
Many use the excellent rail system.
Irish people don't seem to be able to get their head around the fact that everywhere else is not the same as Ireland;
I'm sure there is a living to be made in German property otherwise the landlord of the company apartment over in Germany wouldn't be driving a Nissan 350Z but it wouldn't be a walk in the park because the Germans don't like to part with their money.
 

Almost everybody in Germany has health insurance that allows them to go to the doctor as many times as they want for a fixed fee of 10euro per quarter.

Also unemployment in Poland is about 20% so they should be able to find workers in Poland.
 

I´d like to know where you got the 500,000 figure from. The workforce in Germany is 40m so half a million corresponds to 1.25% of the workforce. Compare this to 14% in Ireland working in construction and it seems very low.

Ten years ago there was a massibe boom due to tax breaks encouraging development in the New Landers of the East - there is now a glut of commercial property in the East. There are also a lot of empty residential units in the East.

However, there have been some huge deals by hedge funds and private equity buying up vast tracts of property - Dresden for example sold off its council flats (48000 apartments) for just over a billion dollars to Fortress Investment Group.
 
dontaskme said:
Dresden for example sold off its council flats (48000 apartments) for just over a billion dollars to Fortress Investment Group.
Click to expand...

That's €20,833 per apartment. Oh dear...
 
Your first question first, Dontaskme: The numbers of construction jobs-compare the previous post of me (at page 1) the number of constructed houses in Ireland with the number of constructed houses in Germany of last jear, then it makes sense. But here again : Ireland 18.6 houses per 100,000 inhabitants versus Germany 2.7 houses per 100.000 inhabitants. Given the better efficiency of German construction workers compared to what's going on Irish sites (one on the ladder, one down holding the ladder and the third watching out for the safety inspector or preparing tea....) this ratio (7:1) makes sense.
I'll get you the exact source of my infos later on so you can check them yourself.

Secondly, not a real question but a statement of yours, the corroding German health system:
5 jears ago any person insured in Germany had the doctor/hospital/longterm treatment for free. Then the €10.- charge per quarter was introduced-for all treatments/doctor visits in that quarter. Then this was increased to €10.- per doctor, meaning €10.- for the general practioner plus €10.- for the optician plus €10.- for the orthopaedic doctor plus plus plus, for every doctor € 10.-, per quarter. Then the hospital €10.- charge was introduced:€ 10.- per day for up to 20 something days, per treatment. Some people have to go twice to hospital-they pay twice then. Then the longterm treatment charge was introduced, going to a "Kur" (I translate it as long term treatment due to my lack of English, or the lack of the English equivalent to it), €10.- per day. Then the "Rezept gebuehr" (priscription fee) was introduced, €10 (or was it €7.50?) for every prescription. This was increased to €10.- for every medication prescribed , 3 medicaments on the prescription for example = €30.-.Some patients nedd a dozen prescrptions per quarter.
Then the OAP homes charged the full home/care costs to the OAPs and not to the healthinsurer as before, plus every treatment of the doctor, plus every prescription etc., see above. Meaning that nearly every little saving/pension old people had saved a lifetime for is gone (their houses/flats are sold by force to pay for the stay), they're now social cases ("Sozialfaelle") - beggars.
Then the min. income limits for the patients where reduced, people on low income had the prescription fees waved, not anymore. All this within 5 or 6 years. Now they want to take out all children from the coverage of the health system, planned for 2007 !!! Planned is an extra tax to cover the healthcare for the children of Germany.
I guess the next step is to take out the handicapped and elderly, introducing an extra separate tax for them.
We should keep in in mind that the reunifacation of the two Germanys increased the population by about 20%.
18 million people without jobs, insurance, no usefull education.That emptied the state coffers within 5 years. You might have heard about that Germany can't keep the Maastrich stability pact on new debts. Imagine Ireland gets reunited on such conditions: the population grows by 20% overnight and these people have no money, no jobs, no social infrastructure. Just the clothes they wear. And Ireland would still have to pay netto contributions to the EU.......

The employement agency of Poland is not looking for miners, farmers, masons or household aides. But for fully trained car mechanics, 3-3.5 years apprenticeship.The car factories are moving faster then the education systems nowadays. With the aid of EU subsidies b.t.w.. The major contributor of these subsidies is:Germany.
The next EU budget will reveal some nasty surprises, to every EU citicen.....
Imagine Ireland is forced to increase all taxes to pay for those things they're used to get for free. Water, transport.....and helping those in need as well.
 
Here are the promised stats of the German building industry: [broken link removed]
Note that the number for 2006 is a prediction made in 2005 - expected were 697.000 jobs for 2006. This prediction is outdated now, the situation is far bleaker, as I said, 500.000 at the moment in the German building industry.It was in the news last week, I have forgotten which station but did my best to supply you with the next best source.
Check the webpage of the "Hauptverband der Deutschen Bauindustrie" for plenty of information, statistics etc....at http://www.bauindustrie.de
They're so well organised that they don't need workers anymore (smiley)......
 
And another one for Ubiquitous: Why paying €20.000 or €30.000 for an appartment in 20th story in dresden when you can get entire houses/(even entire villages!) for free: http://www.ftd.de/politik/deutschland/97087.html
I wonder why I'm still aalowed to post on AAM , my articles/posts about cheap goods are more and more frequently removed by the censor. The latest one -removed yesterday- was about cheap teak furnitures "traded" by a company called "Irish trading " (nomen est omen) at the house and garden section.......Is reality THAT bad for Irish bussines?
 
heinbloed said:
The latest one -removed yesterday- was about cheap teak furnitures "traded" by a company called "Irish trading " (nomen est omen) at the house and garden section.......Is reality THAT bad for Irish bussines?
Click to expand...

Heinbloed, at the risk of going off-topic, do you mind repeating it here? I have bought goods from the Irish Trading Company and am very happy with both the products and the service. It doesn't bother me if they are paying buttons wholesale for their stock - as far as I'm concerned they're still excellent value compared to other furniture on sale in this country. Nike don't seem to have a problem making shoes for 50cent in Asia and selling them for €150 here.

ps I think it is well known that most of the material marketed in Ireland as "teak" isn't teak at all, but substitute hardwoods.
 

There is more to construction than building houses - there are also motorways, underground raillines, tramlines, trainlines, airports, commercial buildings.

There is admittedly a glut of commercial buildings in the east but the other sorts of construction are ongoing.

As to the number of houses per 100,000 head of population, assuming Ireland has 4 million and completes 80,000 houses, that is 2,000 houses per 100,000 people per year rather than 18.6.

Maybe your figures should read per 1000 head of population?
 
heinbloed said:
Here are the numbers for various European countrys showing the numbers of new houses build per 1,000 capita during the last year:

Irland je 1000 Einwohner 18,6 neue Häuser
...
Deutschland " " " 2,7
Click to expand...


Yes, the original figures quoted refer to building per 1,000 of population, although the relative statistics between Ireland and Germany remains the same regardless of how they are stated
 
dontaskme said:
There is more to construction than building houses - there are also motorways, underground raillines, tramlines, trainlines, airports, commercial buildings. ... the other sorts of construction are ongoing.
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With the German public finances in tatters and taxes rising, I really doubt if the government are spending that much on construction of new motorways, underground raillines, tramlines, trainlines, airports etc at the moment.

With consumer sales in Germany also lagging behind most other countries, I doubt if there is that much demand for construction of commercial property either.
 

well, there is commercial building going on


But I don´t think you will get the same sort of capital increases that were evident in Ireland recently.

I saw the projection for a proposed investment portfolio on the internet and they had 6% capital growth projected per year over ten years- this seems wildly optimistic to me.
 
dontaskme said:
well, there is commercial building going on
Click to expand...

one swallow does not make a summer - of course there will be some level of commercial sector construction going on at any particular point in time but in a country as large as Germany, there would need to be a significant volume of projects underway in order for this sector to make any impact on the country's employment statistics.
 

Even if there was an improvement in employment I don´t think that would lead to a huge jump in property prices.

For one thing, the ecb would be more "vigilant" on an overheating property market in Germany than in Ireland and would be faster to raise rates.

Secondly, most people rent in Germany, and I don´t think this would change even if unemployment fell.

Thirdly, there are a lot of empty apartments in the east of the country at least so there is plenty of spare capacity.

Finally, the population density is higher and there are no one-off houses in the countryside so there is less land available for building than in Ireland.

There have been some big deals by hedge funds and private equity so it seems that if you are an investor with a over a billion to invest, German property is as an option.

However, I don´t think there is the same opportunity for the sort of capital growth that has occurred in Ireland recently. The ECB´s overall target for inflation is close to but less than 2% and I don´t see why property should increase at any faster rate.
 
Speaking to my german buddy he was telling me that when you take out a mortgage and if you want to sell your property before its maturity that you have to pay back the bank the full amount of interest that they would have gotten if the mortgage went to maturity.

Does anybody know if this is true ?
 
Since most mortgages over there are fixed rate for 5 or 10 years, there's certainly some early exit penalty. Wouldn't surprise me if it's the full amount as the banks aren't very flexible.

I guess if you were selling to buy a new property, then you could keep the existing morgage for the new property for the remainder of the fixed rate term and avoid the exit penalty. You'd need to check though.
 
Hi guys,
If you have a fixed mortgage, and assuming interest rates stay the same, you need to pay back the difference that the bank lose out on - I think it's the same in Ireland. Or if interest rates are different, for example you have a fixed 4% and ECB interest rates are at 5%, the bank actually give you money.
What a lot of people do in germany is get fixed interest (usually between 5 to 20 yrs) and then get a Tilgung, whereby you are allowed pay back a certain amount of the capital at your discretion each year.
Darragh.
 
To Phoenix n: Yes, your buddy is right. There are exemptions, depending on your relationship with your bank. Continental mortgages-not only those of Germany - are more individually, personally arranged. For example a 90% financing is impossible, a 100% financing is illegal in many/most countrys over there, the financial controler/authoritys have a more carefull look at matters. Planning, sustainable economical developement, protecting the consumer against sharks etc...
Once you're a good costumer with a good credit/account history at your "Hausbank" you'll be more flexible. But as a newbee with your first home and your first year of paying off the debts the limits are much closer as compared to Ireland.
As long as the full amount of the mortgage is not been payed back you're not the owner of the house, that's the law in Germany. You would be the the propiortor (spelled wrong I soppose) in the legal term , but you're not entitled to sell on without the written agreement of the lender. The min. legal knowledge to understand the issue is layed down in the BGB- the "Buergerliches Gesetz Buch" which covers the main conditions of the legal financial conditions.
If you have ever feared the books/texts of laws then the BGB -or an English translation of it - this is the one to start with to get an insight without loosing your head. Plain, logical. In the sense of Brehan law combined with the French declaration of the human rights. Organised in the "German way" , a cultural highlight in the legal profession.
 
heinbloed said:
To Persius: Why do you think tax on property (rental income) in Germany is 25% ? Can you give us any sources for this information?
Click to expand...

http://www.askaboutmoney.com/showthread.php?t=23482&highlight=hamburg

Is 25% correct ?

Still investigating the german market. Its currently very depressed in Germany but there is so many things to consider, tax, mad rules regarding german mortgages etc.

But still think its a low risk gamble with possible high yield returns.

"
Here's another attraction of German property investment to leave you with - while costs of buying are generally high, if you hold a property for ten years it can be sold free of capital gains tax, and rental income is not subject to a withholding tax."

Read the above. Could someone explain the withholding tax part.
 
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