With unemployment falling and a preference for home ownership reported to be on the increase, Germany is likely to turn into one of the hottest property markets in Europe after fifteen years of static prices, reports Assetz.

Growth is starting in cities such as Berlin, where, incredibly, just 13% of the population own their own homes compared to 43% in Germany as a whole, 66% in the UK or 85% in Spain*. As large property portfolio investors start to sell off properties one by one to existing tenants, there are signs of a potential property ownership boom. Interest in residential property is starting to increase, pushing up prices which are now typically just €200,000 (£137,120) for a two or three-bedroom 100 square metre (1,100 square foot) apartment in a beautiful early nineteenth century building in an excellent area of central Berlin.  That is just €2,000 a square metre compared to five times that or more in Paris, London and some other major European capital cities.

Stuart Law, Managing Director of Assetz comments: "With the German economy starting to recover, and the market awakening to the opportunity of property investment with low interest rates, we can expect to see significant price rises over the next 5 - 7 years. Areas in Berlin such as Charlottenburg and Mitte, among the most exclusive and expensive in the city, are likely to see the biggest rises over the next five years, of as much as 15% a year for the next five years once the growth starts properly"

The number of households is set to increase from 39.3 million currently to 41.3 million by 2020 due to an increasing number of single and senior households, which will create a surge of demand over the next 15 years. In addition there is now significant immigration from countries like Poland, just next door to Germany, which underpins the rental market. This is what has helped the UK economy do so well over recent years..

During the last ten years, rents have increased only slightly in Germany, now averaging around 4.5% although they vary significantly. This, along with low property prices and historically low interest rates will enable investors in Berlin to enter the market without facing a considerable risk.

New investment in Berlin has come from foreign shores and culminated in 2005, in what was certainly one of the biggest property deals in Europe, when the UK private equity company, Terra Firma, bought 150,000 German apartments for €7 billion, many of which will be sold individually to private tenants.

Stuart Law continues: "Germans are guarded about taking on debt, having seen their economy in decline for more than a decade, their spending power plummet and unemployment soar. In the meantime, the UK-led phenomenon of buying your own home has been spreading across Europe and with the German economy turning around, we forecast that the German population will soon be following in the footsteps of their European counterparts."

Assetz has opened an Assetz Germany division to deal with enquiries for investment opportunities initially in Berlin, where they have secured two buildings in Charlottenburg, often referred to as the Knightsbridge of Berlin.

Charlottenburg
Built around 1905 in tree-lined avenues close to the parks in central Berlin, the 26 apartments in Charlottenburg have high ceilings and beautiful large windows. Most are already tenanted. Spacious studio apartments are available from £49,566, one-bedroom apartments from £74,363, 100 square metre/ 1100 square foot two-bedroom apartments from £109,824 and three-bedroom 120 square metre / 1300 square foot apartments from £147,643. Assetz can also assist with finance, which is available from 70 - 80% loan to value at an interest rate of around 4%.