I've heard that property prices have hardly gone up in Germany in years due to high unemployment, sluggish economy and a culture of renting? But could be due fro an upturn soon. Anybody invested there? which are the cities to target?
Thanks
Ronald

I?ve just bought in E Berlin. Land 1000m2 for 92000 euros.

I targeted land that could be developed for both residential and or commercial property in order to expose myself 2 both markets. As they climb out of recession, the demand from business for prime space will be huge.

Germany is the worlds no1 exporter, but sentiment has kept prices very low. That?s all changing. Money is flowing into both property and German equities.

I sold my UK B2Ls in order to work my money harder, and this investment is part of that strategy.
Thanks
Ismael

Germany really is on the up, as the market has been stagnant for so long it is good to look at the auctions for guidance.In the last 18 months prices have been gathering pace and the foreign buyers have really started to notice.When I first started investing in Germany there was only 5% of buyers from foreign countries, now it is exceeding 25%.
You can invest in places like Bulgaria or Romania but can anyone tell me that there investment is safe when corruption and fraud is rife .
Get down to the auctions and pick up some real bargains before it is too late.Whatever you want you can get from derelict farmhouses from £1000 to rental investments with yields in excess of 20% to land plots from under £1000 The next auction is in dresden on the 24th nov with the saxony auction group.YOU WILL NOT BE DISSAPOINTED !

I have been reliably informed that the smart money goes direct to bankrupsy auction property either from court or local goverment. Only propery which has serious problems then goes to private auction companies who make good profits even though the properties appear cheap.

A house at the dresden auctions which may have a start price of €15,000 and which auctually sells for €40,000 may well have been available from the local goverment website at €10,000 and no auction fees would have been involved. I guess it all comes down to knowing where to look, these companies seem to think all foreigners are gullible and will buy anything that seems cheap, and they were such good bargains why didn't some of the people working for the auction companies buy them themselves and yes they are allowed to do so.

Think very carefully before buying and check out other places to see if you can find better german properties at cheaper prices.
A friend of mine bought a house at the auctions for €20,000, when he went to get a quote to make it liveable the cheapest one came in a €220,000 because of it's poor state, he also got hit with a €26,000 bill to connect the toilet to city sewage system 3 weeks after completeing the sale.

Your friend must be a bit daft if he never arranged qoutes for work before buying a property from auction, the same as you would when you buy a property here in the U.K. !

I've always been lucky at the auctions.Ive looked at the court auctions but do not think they are any cheaper than the proper auctions as like both ways the guide prices are only starting prices and im also worried about the fact that the court properties you take them as they are and the tennanted properties might come with no leases etc. But maybe im wrong !

If you have any further information it would be good to know !


Alan

I must explain to you that firstly the properties that come up in the auctions are over 90% coming from bankrupsy courts or local goverments in the first place and as such offer no greater or lesser legal protections than buying them direct in first place. Secondly the smart investors who know where and where not to put their money know about these properties several months before they ever come up for auction have the opportunity to buy them then.

E.g it is possible to buy appartments in Berlin, direct for €3,000 - €10,000, for 40 - 60 sqm. Whenever you see them come up for auction start prices are usually €15,000 +.

The auctual auction start prices are set in most cases higher than you could have originally bought them for direct and usually they go higher than the start prices. Usually you will find that are good reasons why nobody has bought these properties prior, either they are going to cost a fortune to restore or the next to a rubbish tip or other such reasons.

Chances are no matter how good a bargain you appear to come accross at the auction only reason someone else hasn't bought it is there were far better deals to be had.

Ok Please find me apartments in Berlin for 3000 Euros,I am willing to buy everyone you get and will give you £2000 for getting them for me.

Also if you took the view that "someone would have brought them before "there would be no auctions of anything anywhere in the world

I am quite happy with that arrangement however you probarbly are only saying that as you don't believe they are available and secondly I don't believe you could afford to buy them anyway.

That said I will provide a website which lists such appartments and at those prices, I even found one on there for €1,000!

Objektsuche - objektsuche.de

Warning!!
I looked into the German market in depth (especially east) and was not encouraged by what I found. Yes there are cheap properties around and yes there is some decent countryside, but here are a few of the downsides:

1) Council Tax is payable in full even if the property is totally derelict.

2) When B2 letting you have to pay all of the bills and then try to claim it back from the tenants. (Not always easy!)

3) If your tenants have a problem, for example a small water leak or some kind of maintenance issue they will not call you to let you know. The first you will know is a solicitors' letter with threats of litigation and withheld rents.

4) When providing a 'warm' flat you can only charge each flat for a percentage of the heating costs. If you have five flats and four are occupied it's not so bad but if a few people move out you have astronomical running costs. The two flats occupied will only pay two fifths of the heating costs leaving you a substantial bill as the winters are long and hard and can often drop below minus 20 degrees.

There are also more properties than people because of a massive depopulation problem in the East. The market is saturated. The economic induced migration is forecasted to last for another generation so tenant prospects are poor and rent potentials very poor.

5) There are massive taxes if you try to sell quickly and make a profit. You have to hold for at least ten years to avoid this and there are rumours that even this will be abolished with a taper system introduced.

6) If you have an electricity supply, you have to pay every month a fairly high standing charge whether any electricity is used or not. They haven't got the equivalent of our nil service charge facility. If you disconnect then there are hefty fees to reconnect.

7) Management companies are very expensive.

8) Labour costs are very expensive, at least the price of the Brits. That's why so many Brits have worked over there for better money than they get in the Uk. Poles and Czechs are not legally allowed to work. Renovation costs are far higher than new build.

9) Listed buildings (Denkmalgeshutzes) are a real money pit. The red tape is much thicker than on listed buildings in the UK and the skilled tradesmen are much more expensive.

10) Not many people in the east speak English. Unless you speak deutsche this can be a real problem.

11) The German economy upturned a little last year but is still in dire straits. The country is literally on the verge of bankruptcy and Angela Merkel is raising taxes to keep afloat. In the next two years there is going to be a major change to the way that property dealers/investors (immobilien maklers) are taxed on their returns. The government wants a much bigger chunk!


All in all Germany is really not worth it. Much better prospects can be found next door in either Poland or the Czech rep. Their economies are massively outgrowing Germany and there are major investments happening. The capital appreciation in these countries has far more potential. The yields are already higher and growing.

I wouldn't go for Bulgaria now as the boat has been missed. Romania is worth looking at but still lacks a lot of infrastructure. Parts of Morocco still offer excellent prospects.

Good luck wherever you choose.