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Blog | 29. Dezember 2016

GROWING NUMBERS OF FOREIGN INVESTORS ARE BUYING RESIDENTIAL REAL ESTATE IN BERLIN

Berlin has become one of the most attractive investment destinations in all of Germany. And it has done so in the space of just a few years. Foreign investors have long been casting interested eyes over the city on the Spree. Which is not at all surprising, for things are looking very good in Berlin: The population is growing, the economy is ticking along nicely, and the real estate market is booming. For the coming year, the Berlin Investment Bank (IBB) has forecast that the German capital’s economy will grow by 2.2 percent – which will make this the fourth year of above-average growth in a row. The forecasts for Germany as a whole indicate growth of just around one percent.

BRIGHT PROSPECTS

The IBB’s economic analysts predict that employment will grow at an even faster pace than Berlin’s economy, with 3.2 percent more jobs in the city by the end of this year. (For Germany, jobs are forecast to increase by just 1.5 percent.) Over the last three years, a total of 130,000 new jobs have been created in Berlin; during 2017 the number of jobs subject to full-time jobs could well increase by a further 30,000 to 40,000. This jobs growth is largely being driven by the huge number of new start-ups and young companies who have made Berlin their home. According to a study from the Institute for Strategy Development, start-ups are now the city’s fifth biggest employer – ahead of Siemens, Deutsche Telekom and Daimler. In the first six months of 2016 alone, EUR 957 million of venture capital flooded into the Berlin’s start-up scene.

INTERNATIONAL CAPITAL FLOWS INTO BERLIN

It has been some time since investors discovered Berlin’s real estate markets: During 2016 initial figures indicate that around EUR 6 billion of investment was pumped into commercial real estate in Berlin. By spring 2016, the investment total had already exceeded EUR 2 billion. And 74 percent of these investors were foreign investors – more than in any other major German city. Residential real estate has also risen up international investors’ agendas, which is entirely understandable given the growing demand for housing in Berlin, the natural consequence of the city’s sustained population growth. Investors certainly appreciate the opportunity to combine low investment risks with stable yields.

TOP DOG FOR ONLINE RESIDENTIAL REAL ESTATE LISTINGS

More and more frequently it is the international middle-classes from Asia, the Middle East and the USA who are interested in buying condominiums in Berlin. The highest demand is for upmarket apartments costing EUR 4,000 per square meter and more. Market observers are certain that the United Kingdom’s planned exit from the European Union will drive demand for residential real estate even higher. Private and institutional investors who have previously focused their investments on London are set to step up their activities in Germany. And it goes without saying that Berlin’s real estate market will be one of the biggest winners fro such a shift, especially as the German capital is already top dog when it comes to online real estate listings – which means that foreign buyers who are searching online for residential real estate in Germany are most likely to find what they are looking for in Berlin.

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Blog | 29. Dezember 2016

GROWING NUMBERS OF FOREIGN INVESTORS ARE BUYING RESIDENTIAL REAL ESTATE IN BERLIN

Berlin has become one of the most attractive investment destinations in all of Germany. And it has done so in the space of just a few years. Foreign investors have long been casting interested eyes over the city on the Spree. Which is not at all surprising, for things are looking very good in Berlin: The population is growing, the economy is ticking along nicely, and the real estate market is booming. For the coming year, the Berlin Investment Bank (IBB) has forecast that the German capital’s economy will grow by 2.2 percent – which will make this the fourth year of above-average growth in a row. The forecasts for Germany as a whole indicate growth of just around one percent.

BRIGHT PROSPECTS

The IBB’s economic analysts predict that employment will grow at an even faster pace than Berlin’s economy, with 3.2 percent more jobs in the city by the end of this year. (For Germany, jobs are forecast to increase by just 1.5 percent.) Over the last three years, a total of 130,000 new jobs have been created in Berlin; during 2017 the number of jobs subject to full-time jobs could well increase by a further 30,000 to 40,000. This jobs growth is largely being driven by the huge number of new start-ups and young companies who have made Berlin their home. According to a study from the Institute for Strategy Development, start-ups are now the city’s fifth biggest employer – ahead of Siemens, Deutsche Telekom and Daimler. In the first six months of 2016 alone, EUR 957 million of venture capital flooded into the Berlin’s start-up scene.

INTERNATIONAL CAPITAL FLOWS INTO BERLIN

It has been some time since investors discovered Berlin’s real estate markets: During 2016 initial figures indicate that around EUR 6 billion of investment was pumped into commercial real estate in Berlin. By spring 2016, the investment total had already exceeded EUR 2 billion. And 74 percent of these investors were foreign investors – more than in any other major German city. Residential real estate has also risen up international investors’ agendas, which is entirely understandable given the growing demand for housing in Berlin, the natural consequence of the city’s sustained population growth. Investors certainly appreciate the opportunity to combine low investment risks with stable yields.

TOP DOG FOR ONLINE RESIDENTIAL REAL ESTATE LISTINGS

More and more frequently it is the international middle-classes from Asia, the Middle East and the USA who are interested in buying condominiums in Berlin. The highest demand is for upmarket apartments costing EUR 4,000 per square meter and more. Market observers are certain that the United Kingdom’s planned exit from the European Union will drive demand for residential real estate even higher. Private and institutional investors who have previously focused their investments on London are set to step up their activities in Germany. And it goes without saying that Berlin’s real estate market will be one of the biggest winners fro such a shift, especially as the German capital is already top dog when it comes to online real estate listings – which means that foreign buyers who are searching online for residential real estate in Germany are most likely to find what they are looking for in Berlin.

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