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Blog | 29. Oktober 2016

PRICES FOR BERLIN’S LUXURY APARTMENTS ARE SURGING – AS IS INTEREST FROM INVESTORS

As investment vehicles, luxury apartments are as popular as ever for high net worth individuals (HNWIs) around the world. Within the next decade, almost fifty percent of HNWIs will have made investments in buy-to-let residential property. The most lucrative investment destinations include Vancouver, Sydney, Shanghai, and two German cities. For high-end residential property investments, Berlin ranks just behind Munich. This was revealed by a survey of 400 leading private bankers and investment advisors who work with ultra-high-net-worth (UHNWI) clients, i.e. individuals with assets worth at least US$30 million.

JUST AS COSMOPOLITAN, BUT MORE AFFORDABLE THAN PARIS OR LONDON

The fact that Berlin is attracting so much interest from international investors has a simple, but very good reason: In many of the most popular real estate centers in Europe and North America, property has become scarce and extremely expensive. The last inner-city building lots have been filled, the number of new, luxury developments is in decline, and property prices remain fairly stagnant. All of this has added to the attractiveness of Germany’s capital. Berlin has finally drawn level with London, Paris and New York City in the elite group of world cities, but it still holds one very important card: Berlin’s property prices are just a fraction of the prices found in other major metropolises. In international comparison, the differences are stark. Whereas prices for high-end real estate in Berlin increased by 9.0 percent in 2015, the global average was a paltry 1.8 percent.

SPREE METROPOLIS OFFERS FANTASTIC PRICE GROWTH POTENTIAL

Berlin’s luxury apartments cost an average of €7,000 per square meter; penthouse prices average €10,000. At the top end of the market, buyers paid €19,000 per square meter for premium apartments in the city on the Spree River. These prices are similar to the level found in Hamburg, and double the prices in Cologne. A glance at the prices paid in other major European cities reveals just how affordable Berlin still is. In London or Paris, today’s buyers are paying up to three times as much for luxury apartments.

As a result, many market observers have identified the greatest price growth potentials in Berlin’s “high-end” residential segment – especially as Berlin’s ongoing tourist boom means that the city is becoming more famous every day. Just last year, the city attracted twelve million visitors – a new record. With more than 30 million overnight stays, 2015 was the best year for Berlin’s hoteliers since records began. Almost two-thirds of these were international visitors, with the largest contingent coming from Great Britain. There were also significant rises in the number of visitors from the United States, Italy and the Netherlands.

BERLIN-MITTE IN FOCUS

Traditionally, real estate investors have followed the paths beaten by tourists. After all, it’s not just tourists, but also tenants and buyers who want to be close to the action – preferably with a clear view of the Reichstag or Museum Island, or in close proximity to landmarks such as Potsdamer or Pariser Platz. It’s therefore no surprise that a majority of “high-end” residential developments are concentrated in the district of Berlin-Mitte. Developers have moved beyond mere construction and refurbishment projects; here they are creating the kind of visionary residences that also appeal to sophisticated international buyers – including en suite bathrooms and full-service concierges. So, buyers can now feel just as much at home here in Berlin as they do in London, Paris or New York.

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Blog | 29. Oktober 2016

PRICES FOR BERLIN’S LUXURY APARTMENTS ARE SURGING – AS IS INTEREST FROM INVESTORS

As investment vehicles, luxury apartments are as popular as ever for high net worth individuals (HNWIs) around the world. Within the next decade, almost fifty percent of HNWIs will have made investments in buy-to-let residential property. The most lucrative investment destinations include Vancouver, Sydney, Shanghai, and two German cities. For high-end residential property investments, Berlin ranks just behind Munich. This was revealed by a survey of 400 leading private bankers and investment advisors who work with ultra-high-net-worth (UHNWI) clients, i.e. individuals with assets worth at least US$30 million.

JUST AS COSMOPOLITAN, BUT MORE AFFORDABLE THAN PARIS OR LONDON

The fact that Berlin is attracting so much interest from international investors has a simple, but very good reason: In many of the most popular real estate centers in Europe and North America, property has become scarce and extremely expensive. The last inner-city building lots have been filled, the number of new, luxury developments is in decline, and property prices remain fairly stagnant. All of this has added to the attractiveness of Germany’s capital. Berlin has finally drawn level with London, Paris and New York City in the elite group of world cities, but it still holds one very important card: Berlin’s property prices are just a fraction of the prices found in other major metropolises. In international comparison, the differences are stark. Whereas prices for high-end real estate in Berlin increased by 9.0 percent in 2015, the global average was a paltry 1.8 percent.

SPREE METROPOLIS OFFERS FANTASTIC PRICE GROWTH POTENTIAL

Berlin’s luxury apartments cost an average of €7,000 per square meter; penthouse prices average €10,000. At the top end of the market, buyers paid €19,000 per square meter for premium apartments in the city on the Spree River. These prices are similar to the level found in Hamburg, and double the prices in Cologne. A glance at the prices paid in other major European cities reveals just how affordable Berlin still is. In London or Paris, today’s buyers are paying up to three times as much for luxury apartments.

As a result, many market observers have identified the greatest price growth potentials in Berlin’s “high-end” residential segment – especially as Berlin’s ongoing tourist boom means that the city is becoming more famous every day. Just last year, the city attracted twelve million visitors – a new record. With more than 30 million overnight stays, 2015 was the best year for Berlin’s hoteliers since records began. Almost two-thirds of these were international visitors, with the largest contingent coming from Great Britain. There were also significant rises in the number of visitors from the United States, Italy and the Netherlands.

BERLIN-MITTE IN FOCUS

Traditionally, real estate investors have followed the paths beaten by tourists. After all, it’s not just tourists, but also tenants and buyers who want to be close to the action – preferably with a clear view of the Reichstag or Museum Island, or in close proximity to landmarks such as Potsdamer or Pariser Platz. It’s therefore no surprise that a majority of “high-end” residential developments are concentrated in the district of Berlin-Mitte. Developers have moved beyond mere construction and refurbishment projects; here they are creating the kind of visionary residences that also appeal to sophisticated international buyers – including en suite bathrooms and full-service concierges. So, buyers can now feel just as much at home here in Berlin as they do in London, Paris or New York.

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