Why Invest In Berlin?
1. Currently one of the most exciting cities in the world
2. Cheaper-priced property than the rest of Europe
3. Rents now rising far more than in other areas of Germany
4. Investment in growing industries
5. History, culture, nightlife is a draw for new inhabitants.
6. Cheap and frequent flights fuelling growth in tourism
7. Arguably centre of Germany’s intellectual life.
8. Extensive transportation network, which allows accessibility to larger areas around central core for living.
9. A city for youth, who will always rent.
Economy and internal property culture:
In the past 15 years Berlin’s economy has gone through a fundamental change of structure. Today, significant funding from Europe, looks to continue well into 2013, allowing for considered future strategic planning, which will further boost Berlin’s development.
Small and medium sized companies are the key to Berlin’s economy, exports are growing and trade and services are also strong. What is more the founding of new businesses continues unabated in Berlin, thus we can expect to see growth in a working population which will require accommodation.
A higher standard of living amongst the population will push requirements higher and larger living spaces will be rented by the higher-earners, whilst the smaller lots will be taken up by those starting new jobs in new businesses.
Migration stabilized in the years 2000-2003 with little change to the net total. The latest statistics (December, 2005) indicate that over 7,000 people arrived during the year. Berlin is growing again!
The rental market will expand.
Moreover, in the current market a new apartment in Berlin costs 30% less than the same apartment in Munich, international comparisons reveal Berlin property at an average price of 1,000 euros/m2 with Paris and London in excess of 5,000 euros/m2. Berlin property prices are currently below those of Prague, Budapest and Warsaw, to name just three!
Only 12% of Berliners own their property compared with over 20% in Hanover, Hamburg, Munich and Stuttgart. Overall in Germany, 43% own property and the trend is rising!
The average comparison between Munich and Berlin for 2007 as follows:
Purchase Price [€m2] Berlin 1,229,00 Munich 2,014,00
Rental Income [€m2] 7.48 9.88
Yield 6.09% 4.91%
What this all adds up to is a tremendous investment opportunity!
External forces for growth:
Tourism increased by 16% in 2004 alone. In excess of 2,000 four and five star hotel rooms have been built in the last 3 years including Ritz-Carlton and Radisson. There were 14 million overnight stays in 2005 compared to 11.2 million in 2003. British tourism increased by 22% in 2006 alone and is still growing.
Air traffic into Berlin airports is up by 8% in 2006 and flights arrive from Ireland (Belfast, Dublin and Cork) and the UK (Bristol, East Midlands, Glasgow, Liverpool, Manchester, Newcastle, Gatwick and Luton). A new airport (Berlin Brandenburg International) is under construction, which will bring significant levels of investment.
Berlin is an exciting and vibrant city, undivided, metropolitan, and growing year-on-year into itself and its destiny as a great cultural and commercial centre. It represents unbelievable value, here you can purchase an apartment, ready to rent, or already rented from €50,000. You could just about buy a parking space for that in London!
