The Property Trends in Germany 2016 look very promising indeed as Germany emerges as the most rising star of European real estate. Germany came into its own in 2015 and is today recognized as one of the most powerful countries in the world. The German economy is the engine that Europe runs on.
The situation in Europe is such that there are only two countries that continue to do well economically, even as the rest of the continent struggles with mounting debt. UK is one country that is doing well, and the other is Germany. The famed German Machine has never looked more powerful.
But Germany was never known as a popular destination for the overseas property market. That is changing fast. Indeed, things look bright in Germany as far as the real estate situation is concerned as well. Germany looks set to compete with London for the highest stakes in international real estate. Many wealthy foreign investors from China, Russia, Brazil and the Middle East have been relocating to Germany.
For long, most European investors were drawn to London. The City of London is the financial capital of Europe. But in the current scenario in Europe, there are many who are turning to Germany, as Germany promises to be a safe haven for their investments, and as a safeguard against a possible dissolution of the Eurozone.
Suddenly, Germany finds itself getting investments from across the world, with a lot of cash rich Russians and Chinese in particular, looking to relocate to Berlin, Hamburg, Munich or Frankfurt.
The reason for the sudden jump in interest in Germany is easy to see. The last two years have been great for the German economy. Even as the economies of most countries Europe declined under the impact of the global housing crisis of 2008, the German economy held steady and grew in strength and power. Today there is a perceivable difference between the German economy and those of the other countries in Europe.
This hasn’t gone unnoticed by wealthy non-EU individuals looking to relocate to a European country. For many such high net worth individuals, buying real estate abroad is a huge decision that can make all the difference to their finances. It’s a huge commitment to be taken after considerable thought.
Relocating to Germany, which, along with the United States is the most stable economy in the world, makes a lot of sense if you are a wealthy Chinese or Russian investor with ready cash, looking for a safe haven to park your money. Since there are already a number of foreign nationals who have bought real estate in Germany, this has certainly set the right precedent for many more to follow.
The local real estate developers have reacted to the new demand for German properties by building new developments targeted at ultra rich foreign nationals, principally from China, Russia, Brazil, and the Middle East. Since a lot of foreign investors already work in Germany, moving here isn’t a hard decision to make. In fact, it is only the most obvious thing to do.
Who are the wealthy foreigners looking to buy properties in Germany? The rich Russians who are looking to get away from Russia and relocate to someplace safe, such as Berlin or Munich, are not necessarily rich oligarchs. Most of them are self-made entrepreneurs who have sold their businesses and are looking to retire or work in a place that is more conducive to doing business. They want to be in a country that can make them feel secure and give them the assurance they seek about the safety of their investments.
So, fueled by the new interest in Germany, prices of luxury real estate have increased by 9% in Berlin in 2015. Residential property rates in Munich grew by 8% and Frankfurt came third at 7.5%. The growth in property prices in Germany looks set to continue in 2016 and beyond.