I was interviewed by BBC and a small piece of what I told you can read here:
As the third most-visited European capital after London and Paris, Berlin is still a place where artists come to create their dreams.
The majority of residents in Berlin â€“ nearly 85% â€“ rent, and housing costs have risen more quickly than in other German cities. However, prices are still far lower than in other major Western European cities, including Hamburg, Brussels and Vienna. â€œThere are many advantages to renting,â€ said Alexander Korte, founder of BerlinInvestment.com, an estate agency specialising in foreign buyers. â€œThe laws are pro-renter and the landlords canâ€™t raise the rent just as they wish.â€ A 70sqm flat can rent for around 600 euros a month in neighbourhoods such as Kreuzberg or the gentrifying Friedrichschain, while Mitte is seeing rents reach 2,000 euros a month.
But buyers are also flocking to Berlin since apartments and houses are cheap for a major European capital. The property market has seen an increase in residential prices of more than 32% since 2007 and luxury developments and conversions are in demand. The rise in price is fuelled by Spanish, Italian Russian, British and French investors, as well as Germans, who consider Berlin a bargain and want a safe and inexpensive place for their euros. Currently, the average housing price in Berlin is 2,000 euros per square metre.
Its is astoundingly how fast and good especially foreign journalist, who seem to live in Berlin, discover new areas that are attractive and or undervalued.
Now NY Times journalistÂ Nick Foster published one of my longtime favourites in the market.
[click to continue…]
The transfer of property isÂ subject to GermanÂ Real Estate Transfer Tax.
Hereby the hight of the transfer tax is between 3,5% and 5% (Berlin) depending on the federal state.
To avoid German real estate transfer tax it was practice to sell shares of a company owning the property (so called share-deal) instead of selling the property it self (so called asset-deal).
Now Germany put a new law (effective on June 7, 2013) to prevent this miss-use and make the German federal tax law more fair.
Here is how the so calledÂ RETT-Blockers (RETT stands forÂ Real Estate Transfer Tax)Â used to work:
Not the property would be transferred but 94% and 6% shares of a company owning the property.
The transfer of shares in real estate-owning companies is in generalÂ subject to German Real Estate Transfer Tax if at least 95%Â of the shares in the company are accumulated or at least 95%Â of the shares are transferred to new shareholders.
To circumvent this it was use to transfer only 94% of the shares to the new owner and the rest of 6% either stayed with the old owner or were transfer to another entity not equal to the 94% shareholder. However the 6% entity could be owned by the 94% company trough a holding structure.
As the yields in residential markets shrink and the office market seems one possible investment alternative this report might give advise
The IVG Germany Office Market ScoringÂ research report can be found here:
There are several ways to buy a new home in Berlin.
- used flat
- new flat from a developer
- new flat as a cooperative (Baugruppe)
1. buy a used flat or house, most often via Immobilienscout24.de .
2. buy from a developer either an old rehabed building or a new buildt building. This offers are typically find in Immobilienscout24 as well but there is a special site called: neubau-kompass.de.
risk / maintenance goes down, price is higher than a used flat.
There are fakes on the market, they play developer but they only do a paint job.
As you will have a5 years warranty on the everything the developer build or replaced its important to know what he will deliver.
This you find in the “Baubeschreibung” (a description of the quality of construction).
3. A way most people don’t know about, are “Baugruppen” which directly translated meansÂ “Building Groups” in southern areas often referred to as cooperatives. The main idea: The “buyer” become part of a company, that actually cuts out the developers. With all the risk and benefits. Often those groups are initiated by architects (some more professional other because they want to buildt their own home). In fact the projects are often well planed, it takes more energy so, because the groups have to discuss their way, but in the end the product is often better or cheaper or both. Some of them have a social or green aspect often both. There are weekly meetings to get in contact with those groups, check the links below.
Information on Baugruppen / Building Cooperatives in Berlin
Baugruppen Architects for cooperative building projects
For aÂ Google search use this terms:
The Natulis Group is planning 89 residential units for sale at Scharnhorststrasse 30-32 in Berlin’s Mitte district. From August 8 to 30, 2012 Natulis Art Temporary offers 9 free studios for artists on the plot. Which is at least for Berlin a new way to attract attention for a property development. The 3.500 sqm plot is close to the new main train station and the development area Europacity. Their selling prices should be between 2.750 â‚¬/sqm and 6.300 â‚¬/sqm. A total sales volume of nearly â‚¬40mn is expected. Ziegert Bank- und Immobilienconsulting has been commissioned to perform the marketing and sales.
Source: Natulis AG & THOMAS DAILY GmbH
DB Research recently (29.06.2012) published a study regarding property prices in the euro area.
Euro area property prices: Germany versus the rest
Subjet of the study are prices of residential properties in the euro area.
While in all euro markets the prices for residential real estate are above the long-term average affordability, its opposite for Germany.
The exception to the general picture of overvalued markets is Germany, where
fundamental values remain at historical lows despite some price increases in
recent years. Given Germanyâ€™s status as a safe haven in Europe for investors
and in view of Germanyâ€™s likely economic outperformance of other European
countries we envisage further price gains in the German real estate market.
Prices are likely to rise fastest in cities with more than 500,000 inhabitants.
Get the full report by email.
As the prices and the city it self growth, and central area have nothing to develop or rehab anymore, the developers as well as investors move on. And so do their clients, the center is really expensive now compared to the suburbs. This is right and it felt a little strange all the years after the reunification that the core city center is more or less as expensive as normal areas.
However in our constant search for good developments and investments we now added:
- Wilhemsruh in Pankow
- Zingerwiesen in Pankow
- NiederschÃ¶nhausen in Pankow
- Kaskelkiez in LichtenbergÂ (for multi-family-house investments and rehabilitation of prewars)
- Weitlinger Kiez in Lichtenberg (for multi-family-house investments and rehabilitation of prewars)
- Rummelsburger Bucht in LIchtenberg (ok a little late, I agree)
- Alt-Stralau in Lichtenberg
- Neukoelln area around Weichslplatz, area around Boddinstreet
- Nordufer in Wedding (Best price/potential ratio in all of Berlin)
Find the whole map with more advise and data here.