At first glance, Germany is not the most glamorous European destination, or one that would come to your mind immediately, to make a sensible real estate investment outside of France … but it is rather the Portugal or Spain. Except that, even if the trend is still marginal, a growing number of individuals are putting their money in German housing. The big cities located in Germany, Berlin in the lead, offer strengths in the eyes of French investors. Invest in the stone reassures. So invest in the stone of the first economy of the European Union … it is the equivalent of a double airbag.
Quality of life
But there is no question of financial security. It is also good to live in the Federal Republic of Germany. Munich, Düsseldorf, Frankfurt, Berlin, Hamburg, Stuttgart and Leipzig are, along with Swiss cities, among the most appreciated in the world for their quality of life, according to the 2018 ranking of the international firm Mercer.
“Germany is the European market that attracts the most private and institutional investors, due to strong rental demand and the quality of tenants,” said Charles-Henri de Marignan, head of the direct property division at IEIF. Moreover, even though real estate prices have risen a lot in recent years, the market of the main German cities remains at an attractive level because it is equivalent to that of the French regional metropolises outside Paris. ”
Less than 4,000 EUR / m2 in Berlin
Among German cities, Berlin still holds the upper hand. The metropolis presents “excellent investment opportunities,” says the international luxury real estate network Barnes, in its 2018 report of the favorite destinations of the wealthy clientele in the world *. “With a very favorable demographics, a rapidly growing local economy, a bubbling cultural energy, an architecture in full renewal, green spaces that represent 40% of the territory and very affordable real estate prices, argues Barnes, Berlin has the wind in its sails. . ”
Despite their sharp rise since 2010, the prices of the former in a European capital of this size remain today still more than half of the Parisian level. Thus, it is necessary to count, on average, below 4,000 euros per square meter in Berlin, while in Paris it is negotiated beyond 9,000 euros. In the luxury segment, the investor will have to pay, according to Barnes figures at the end of 2017, for apartments: 8,000 euros per square meter in the high-end and 15,000 euros / m² for exceptional properties.
Potential for catching up
Even if the Parisian stone continues to climb, the perspectives of surplus-value seem much higher in the Rhine. “For the past four years, Berlin prices have risen by 8 and 10% a year,” explains David Nguyen, partner of the Franco-German agency Aden Immo. They should further progress in the coming years driven by the economic development and population growth of the city. ”
According to the professional, Berlin’s catch-up potential in the next ten years is important if we look at the gap between the old and the new – at 6,000 euros per square meter on average – and compared to other large German cities. In Munich, the most expensive city, average prices reach nearly 7,200 euros / m² when they are near Hamburg and Frankfurt, respectively, 4,100 and 4,300 euros / m². Prices fall to about 2,000 euros / m² in the heart of Leipzig, a big city in the East considered to have high potential.
The quality of the Berlin rental market – high percentage of tenants (more than 80% of the population), low rate of unpaid and vacancy, good maintenance of the park … – tranquilizes the investor. However, rents are low and increasingly framed, of the order of 9 to 10 euros per square meter in Berlin (on average 25.50 euros / m² in Paris). But the charges are reasonable and taxation, very favorable for the tricolor investor through an agreement between the two countries that excludes double taxation. German real estate taxation is clearly better.