Quote:
Originally Posted by deutschinvest
I noticed an interesting report in this week's Buy Munich Property newsletter, Sept 18th 2007, regarding the current state of the German property market:
" The German institute of town planners (Institut für Städtebau) has recently reported on house price trends in Germany (Der Spiegel, August'07). In particular, it reports that house prices are continuing to see upward pressure, particularly in the cities, due to a general housing shortage. On average, the cost of a house in the west is €173k (+1.2% increase over the year), whilst in the east the average price of a house is only €100k (+1.4%). Due to the VAT hike earlier in the year, as well as the recent high price rises in raw materials, construction machinery and energy costs, even fewer houses are now being built currently. In Q1 of 2007, planning applications were down by 44%, with applications for the building of detached and semi-detached houses reducing by 55%. The result is that about 100,000 too few housing units are now being built each year. Munich is by far the most expensive city in Germany: the average price for a detached house is €379,800 with a modest increase of 4.3% over the year. This compares with an average price of €249,300 (+8.6%) in Berlin and €295,100 (+9.1%) in Hamburg. If the German economy continues to pick up, these upward pressures on house prices can only increase. "
Does anyone have any comments on the reported relative house price rises in Berlin & Hamburg, as compared with Munich, whether these are likely to be sustainable, and whether Munich prices are likely to see similar higher growth rates in the future?
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This comparison is not as easy as it sounds or as easy as some would like you to think.
I'll try to keep my answer simple and brief.
Comparing Berlin/Dresden/Leipzig/Rostock with the likes of Hamburg and Munich is like comparing the home counties to say Newcastle and Sunderland ten years ago.
It could be pointed out to you that maybe you should check how much ground the north east has made up on the home counties in the interim period.
This may be an indicator of how you could expect these eastern cities to rise in comparison to the western cities.
Now Germany may follow in the pattern of the UK or it may all fizzle out.
If I had a crystal ball I'd supply you with the answer right now - but I don't and neither has anyone else.
What do you think is likely to happen given what you already know?
I have made my decision not just by listening to analysts and statisticians but by going to the places in question, viewing, listening, looking at the job ads in the local papers (sometimes tells a different story to the one you will hear from Snodgrass, Smyth and De-Humidifier, the world famous economic forecast experts.
Most analysts would have had Whitehaven, Cumbria as an absolute basket case location twenty years ago. A forward thinking local council, some good marketing men and a marina later - What do we have? Go and take a look!