BERLIN REAL ESTATE

So it‘s finally happened, Berlin Real Estate has entered the Top 20 of the UK’s favourite overseas property destinations. Says who? I hear you cry.... well no less than that ever popular UK television show ‘A Place In The Sun’ who have published the listing in their latest magazine (March, 2008).

During the last twelve months, after years of minimal market growth, the market has finally woken up to the fact that one of the most attractive capital cities in Europe actually has the cheapest property prices. Yes it’s true - you can buy an apartment in Berlin for the price of a garage in London or Dublin!!

The attractions are clear for as well as the low purchase prices there is huge capital growth potential and high investment returns. Add to this lower mortgage rates, a culture of renting thus providing an enormous pool of long term tenants and you can see that the buy-to-let market is in for a serious price correction. Factor in the growing strength of the German economy, the significant increase in tourism and the increasing number of cut-price flights to Berlin and the mixture sounds familiar.

Yet another factor driving the market is the domestic price comparison with other cities in Germany. Hamburg, Munich and Frankfurt are all considerably more expansive that the capital city. A two bedroom apartment in Mitte, Berlin is available at 280,000 €, whereas a similar prime location in Hamburg would be 595,000 € or in Frankfurt at 450,000 €.

Berlin real estate is enjoying a rising and healthy market. The German Statistical Office has property prices in Berlin rising 7.8% over the twelve month period between autumn 2006 and 2007. Importantly this is not some holiday-home market by a sunny beach either for unlike Bulgaria, Morocco, Spain and even Dubai the market here is a correction fuelled by the German economy, falling unemployment and an increasing domestic desire to invest. Add to this the consumer protection afforded within the EEC and it’s not difficult to see why the savvy investor is taking a serious look at real estate in Berlin.