Germany’s Walls of Investment Come Down

Property prices in Germany are falling, while those in countries throughout the rest of the world are soaring, prompting some to believe it is the perfect time to pick up a bargain German property.

Reports in The Telegraph show that Germany is at the bottom of the Knight Frank Global Price Index while Latvia tops the chart, followed by Poland. Both of these countries neighbour Germany, yet the latter is seeing prices falling by 3.2%, despite having the EU’s biggest economy and population. Factors such as these are putting it firmly on the real estate investor’s radar.

Prices remain low in Germany due to a number of factors: supply of homes has far outstripped demand; renting has become much more attractive than buying, thanks to strict rent controls; and the cost of buying is high (around 12% of the purchase price), as well as the difficulty of attaining mortgages.

Estate agents are now beginning to sell properties to foreigners for investment - the most promising investment markets are currently in Hamburg, Berlin, Dusseldorf, Frankfurt, Stuttgart and Munich.

Knight Frank's Liam Bailey advises that "Investors should…..look more closely at the German sub-markets…..that's where the hot spots are".