Are you planning to sell your property in Germany 4 cash? There is every indication that the German property market is now the most vibrant one in Europe. Germany is a Western European country with a landscape of forests, rivers, mountain ranges and North Sea beaches. It has over 2 millennia of history. Berlin, its capital, is home to art and nightlife scenes, the Brandenburg Gate and many sites relating to WWII. Munich is known for its Oktoberfest and beer halls, including the 16th-century Hofbräuhaus. Frankfurt, with its skyscrapers, houses the European Central Bank.
Homeowners in Germany have benefited spectacularly from the recent emergence of the country as an economic superpower – not just in Europe, but on the global stage. This has sent the valuation of their homes and apartments in Germany shooting up.
For as long as one can remember, Germans were known as people who would rather rent an apartment than buy one. But with younger Germans, who are more confident, and materially better off than the older generation, there is a real desire to buy apartments in Germany online.
Conditions in Germany are such that it makes better sense to buy an apartment or a house than to rent one. Mortgage rates in Germany are at their historic lows, so much so that the interest rates have turned negative! More importantly, the rental market looks very expensive.
The rising rental prices have even become a major election issue. Johannes Fechner, a member of the center-left Social Democrats and an ally of Chancellor Angela Merkel had a warning for the government: “The problem is that in big cities such as Munich, and some of the university towns, the rents have risen so fast that if you are a policeman or a nurse you have no chance of being able to live anywhere near the center and have to move far out to find a flat. Increasingly people are having to spend more than 40 per cent of their net income on housing, which is too much,” Mr. Fechner said.
Home prices are reasonable at the moment, but they are not going to remain so for long. Home prices in Germany have risen at 5.6 percent over the last few years according to UBS. There is every possibility that we are headed for a real property boom in Germany.
Real estate analyst Thomas Beyerle says in an interview with the Die Welt, “Last fall after the stock prices of German real estate government had sometimes doubled in recent years, investors began to cash in their profits. Because stock markets deal in the future, developments there often reflect later events in the real estate markets.”
Deutsche Bank said in a report that high demand for property, insufficient housing stock and low vacancy rates would result in higher property prices, especially in Munich and Berlin.
According to a Deutsche Bank report: “All the macroeconomic conditions that might signal an end to the cycle – such as a turnaround in interest rate policy, a massive expansion of supply and/or a slowdown in migration to Germany – are not yet fulfilled and it is likely to be several years before they materialize. Consequently, we expect rents and property prices in the major German cities and across the country to continue to rise sharply in 2023.”
Indeed, this is a great time to be involved in the German property market, whether as a buyer or as a seller.