Real Estate News, Reviews and Investment
Article: The strength of the German economy makes real-estate investment in all forms attractive.
A recent report showed that Germany has overtaken Britain as the most attractive property market in Europe in 2013 as the receding fears about a breakup in the Euro zone has encouraged investors to come back to the European property markets. </intro>
The survey of 362 investors showed that 35% picked Germany followed by 24% who chose Britain.
Residential property in Germany
Most Germans live in accommodation that they have rented and the proportion compared to the total population at 55% is among the highest in the world.
Because German banks have been conservative about mortgages, home prices have continued to grow despite the global economic downturn.
Figures for growth in the other major cities are:
The outlook for 2013 for Germany
German property markets are expected to remain stable compared to the general weakness in other European property markets. There is potential for capital growth in some areas but stable prices and rents in others and no possibility of a real-estate bubble developing.
The limited supply of quality housing assets contributes to the stability, though high-quality assets in locations in inner cities have become relatively more expensive.
Another sign that no housing bubble is developing is because prices and rents in Germany are still lower than the neighboring countries.
Here are some figures on how much of income is spent on rent:
You must also view this against the fact that affordability is increasing along with rising wages in Germany.
The bottom line
The strong economy and the low rate of unemployment mean that property markets will continue to be stable and strong. Rent increases have grown faster than property prices rising by around 13% between 2000 and 2010 compared to an increase in average prices of housing of around 11%. All this makes for attractive investment especially if you are looking to buy income properties.