Berlin is a world-class megapolis that has become one of the best cities for real estate investment. Its modern infrastructure, developed economic situation, optimal living conditions, and location offer investors enormous opportunities for additional income by investing in residential property in Berlin's best neighborhoods. Significant economic growth is leading to the creation of numerous jobs, attracting talent from abroad, signing major contracts with international companies, and more. It's also worth remembering that amidst a pandemic, Berlin is considered one of the best cities for effectively combating the virus, making it one of the safest and most reliable cities for investment. Our company will help you understand:
Where to invest?
Why invest in real estate in Berlin?
How to protect yourself from capital loss and currency risks?
To make a сonscious decision about whether to invest in real estate in Berlin, it's worth considering a list of amazing facts about this megapolis:
Germany and its advanced economic position in the global industry;
Real Estate Price Rise and Outlook;
High affordability of real estate in Berlin compared to other European cities;
Stable rental yields;
Real estate shortage, demand significantly exceeds supply;
New buildings and bank financing.
Real Estate Price Rise and Outlook
Statistics show that from September 2020 to September 2021, real estate prices, particularly for new buildings, in Berlin increased by 20.2%, and in the existing market by 4.6%. Looking at the last decade, analysis shows a price increase of 196.6%. Therefore, based on these data, we are seeing significant price growth. Given Germany's rapid economic development in all areas of life and activity, we can confidently assume that by the end of the 2020s, the population density will reach 4 million, and the city itself will become a key area for business and industrial infrastructure development. Accordingly, given all these statistics, we expect real estate prices to increase.
Berlin is highly affordable compared to other major European cities.
The average price per square meter in Berlin is significantly lower than in many other developed European cities. Currently, the average price per square meter is €6,500, compared to €9,060 in London and €11,000 in Paris.
Stable Rental Income
Rented properties generate a stable monthly income under the rental agreement between the tenant and landlord. Unfortunately, short-term rentals in Germany are not easy to obtain due to legal restrictions, but with the necessary documentation, it is entirely possible. Looking again at statistics, over the past year, rental yields in Germany ranged from 2 to 5%, which is significantly higher than in France or England.
Remember the key rule of buying and selling: supply and demand. This balance is usually quite fragile. But in Berlin, real estate demand and supply diverge significantly from year to year. The reason is simple: the number of properties is far fewer than the number of people looking for their perfect spot, leading to a decline in home sales and purchases. And the number of new constructions simply cannot keep up with real estate demand.
New buildings and bank financing
Since approximately 40% of real estate in Berlin is built before and after the war, demand for new buildings is very high. The German government is proactive and encourages residents who purchase property in energy-efficient buildings, offering the opportunity to receive a 50% subsidy or preferential mortgage terms. Another attractive factor for investing in new buildings is the rental price, which is several times higher than in the existing market, and prices generally continue to rise. When purchasing a home in a building that hasn't yet been completed, the owner makes payments in installments, exclusively as construction progresses. Perhaps a nice bonus is the fact that, with such high demand, selling a new building can fetch a higher price than the initial purchase price.
If you are planning to obtain a residence permit, invest in a country's economy, or purchase real estate abroad, we invite you to a consultation with our company. During a personal online meeting, we will thoroughly discuss your questions and create a step-by-step action plan for you.