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My readers know that in general, I am a big fan of residential blocks (multi-tenant-housing, or multi-family-house as we call this in Germany), but at the current market situation, I think it’s smarter to buy a portfolio of flats in central areas.


For readers on the fly, here is the conclusion of this article:

We advise our clients to purchase a collection of apartments in the same building, as the multipliers for blocks are as high as for units. To buy a portfolio of flats spread over different locations and condos could get tricky, and that is why we recommend buying the same property administrated by the same property manager to keep things easy and smooth. Another option is to merge the flats and there for having a bigger flexibility if the market needs change (see below).

Here is my explanation why. [click to continue…]

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Micro-Apartments as an Investment

Micro-apartments, also called micro-flats, are one-room separate living spaces. Usually, they contain an area to sit, sleep and study, a small bathroom and kitchenette with a size of up to 28 square metres. In some properties residents also have access to shared bathroom and kitchen facilities, on rare occasions even patio and roof garden.

This type of investments seems nowadays to be everybody’s darling.
Even the German government wants to lower the pressure on the housing market in urban centres and invests 120 Mio Euro to speed up innovations around micro apartments. (see press article here)

[click to continue…]

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Attic conversion legal traps

​As the city of Berlin becomes more and more popular and therefore dense, and penthouses are more and more attractive attic conversions are getting popular. Private buyers are more and more willing to buy such a project instead of a finished flat. [click to continue…]

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Residential property under 100.000 Euro, here is how and why

Get my explanation that my clients typically pay for.
It is hard to find properties below 100.000 Euro nowadays,
especially when it should have features like:

1.) vacant
2.) lift/elevator
3.) central heating
4.) refurbished or new,

and above all
5.) location, location, location.

Why those features are important, and what are the benefits of buying either into a non-attractive ‘ugly’ flat or a small one, I will explain in this video. [click to continue…]

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Disruptive startup for office space

We interview with setting.io founder Johnathan Teh.

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Berlin Real Estate Market Update 01-2015

Angebotsmieten 2009 vs. 2013 in TOP5 German Cities
While most Berliner hope that the strong rise of housing prices since 2009 will come to an end, the top broker agencies, as Zabel and Ziegert report strong demand from foreign, as well as from domestic buyers.

The shortage in flats and the growing demand for space in combination with historical low interest rates (both for loans, as well as for alternative investments, in combination with a tendency for fear of inflation) fuels the market.

But right now the prices for plots and empty houses, the basic resource needed in order to produce residential space are growing faster than the prices for new constructed flats.

The problem of Berlin is that only in a few districts the rents are that high that new constructions make sense. Even the local municipality owned housing cooperatives admit that they need round about 9€/month/sqm net cold rent (without side costs) in order to produce new constructed multi-family-housing break-even. This is only the case for about 25% of all rental offers in Berlin, as stated by the BBU Marktmonitor 2014.

In this areas (were new construction makes financially sense) supply of plots is very limited, if not non existing.
Berlin still does have a lot of unbuilt plots in the city but the rents there are to low to justify new construction, which typically needs a price tag above 3000 €/sqm.

On one hand we can understand the politicians that want to save the tenants from increasing rents, but we should treat people equal, says Alexander Korte of AMLT Group, a Berlin based residential developer. Why does a new relocated household have to pay 2-3 times more rent than a household who lives here since ages. That sounds highly unfair to me. Please take into account that those household typically have well payed jobs in the strong technology and start-up sector in Berlin, and therefor not only pay more tax, but bring money in the city via consumption and public fees (In Germany fees for public goods, as kindergarden are linked to the income.
Taken into account that the preservation of rents is exactly the number one parameter that keeps developers from building the strongly needed housing, the strong legal tools just introduced to minimize rental growth is exactly the wrong medicine.

The paradox is that the politicians keep rents low and therefore increase the problem.
New housing doesn’t make sense in most Berlin areas, so new supply is nor planed, neither executed.
Here we need higher rents that developer start to build in this areas.
As demand grows and supply stays limited the rents have to rise, and they will find a way to rise.
Talk to an senior property manager and he will tell you what happened when in the 1960ties the rents were artificially frozen by the government. Landlords started to collect money on the side. s.th. like this will happen again.

Since years the output in new housing in Berlin is on a historical low of around 3500 units per year, this is less than in Munich (1,4 Mio inhabitants) or Hamburg (1,7 Mio). Experts see a number of 19.000 new units per year in Berlin needed to cover the demand.

In the end investors in income producing rental property, who typically take much less risk as developers will benefit from the low new output. Rents will rise no matter which legal frame wants to tie them, and tenants will stay tenants, rather than become economical thinking and retirement planning real estate owners, because they hope and believe that politics can and will fight the market logic.
But in the end nobody is helped.

Is this really what politicians want? What do you think? Please comment.

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Maybe the most important Berlin map for Real Estate Folks

Berlin U-Bahn Bar MapDrinking might be the only solution after a hard day of researching and sourcing property out there. This map shows a good bar close to every U-Bahn stop.

We recommend the U2 and U8 drinking line.

Find the original big version here.

Filed under essentials ;-)

Big thanks to the guys from Thrillist.com.

 

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ZIEGERT Condominium Report Berlin 2014

ZIEGERT Berlin Condominium Report 2014We added the brand new ZIEGERT Condominum Report 2014 to our extensive research report library.
This issues is published by ZIEGERT for the first time.
Do you need Berlin Real Estate Market Data ?
Drop us a line and we give you free access to our archive dating back to 2005.
Get the ZIEGERT Condominium Report 2014 (German or English Version) directly from Ziegert Immobilien here.
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The Economist interactive guide to the world’s housing markets

Very interesting data and  cool graphics from the economist on global real estate markets.
The stand outs are:
  1. Germany still cheap absolute and especially relative.
  2. Most Anglo-saxon markets excluding the US in a clear bubble.
  3. Italy and Spain reversing downwards towards their average and becoming more affordable but not yet cheap.
Here is the link:
Enjoy
Want more research data? Post us a note:

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Rising locations in the Berlin property market updated

The biggest challenge property investors face in a new city is the location question.

Therefore we regularly publish location information for the Berlin property market.

In 2014 we added so far:

  1. Potsdamerstrasse, the north part of the street towards Potsdamer Platz
  2. Area around Gleisdreieck
  3. Victoriastadt typically named Kaskelkiez

The full list of our Berlin location recommendations can be found here.

Potsdamerstrasse, the north part of the street towards Potsdamer Platz

Area around Gleisdreieck and Gleisdreieck-Park

Victoriastadt typically named Kaskelkiez

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