"Does anyone know about Buy Munich Property (http://www.buymunichproperty.com)? The German property market now
appears to be well priced, with Munich particularly being an attractive proposition. However, speaking German is not my forte, and I'd still like to get exposure to the investment opportunities in Munich. Buy Munich Property is offering regular information just about the Munich property scene, and I was
wondering if anyone is subscribing and give me some feedback."

I've just noticed, while browsing around, that Buy Munich Property is offering a free 2-week trial subscription to their weekly newsletter. You also get access to their research archive. I've just taken out the free trial - just need to supply your email address - and newsletter seems to offer a mix of news, info and tips to the German, Munich property scene. Seems more aimed at the BTL type investor.

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?

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!

With the competitive devaluation of major currencies, high levels of major stock markets, and problems in many real estate markets, it's not too clear where to put your wealth. The German property market has been in the doldrums for so long now, that wealth risk seems minimal. A recent Buy Munich Property article said something along the same lines:

QUOTE
It’s good to read with stock markets gyrating
that German housing continues to offer the best form of
wealth guarantee apart from cash itself, according to the
Hamburg Institute of World Economy. In a recent report,
it states that for the past 16 years, German property has
offered a 2.57% year-on-year increase in both rent and
property values. Also, according to a recent (Oct’07) Die
Welt survey of 60 foreign investors in German property,
two-thirds still consider the German property market
undervalued, 55% expect rents to continue increasing,
and 97% intend to increase their investments. Munich
remains at the top of the tables in terms of attractive
investment areas, with the Institute of Wealth Creation
predicting property prices rising by at least 70% through
to 2020
UNQUOTE

BEST PROPERTY - MUNICH - TOP LOCATION -
For further information don't hesitate to contact:

moluet@gmx.de
+49 - 171 - 5085186

Buy Munich Property seems to have re-invented itself as Invest German Property, but anyway still have interest in Munich - just like me

Their recent market update on May 6th indicated overall 2% mkt rise, which was actually less than I'd like, but seems reasonable given the price falls and poor sentiment in most of W.Europe.

Since we last looked at the Munich market, overall
sentiment remains positive, but some concerns due to the
credit crunch and lower Euro-zone growth rate have
emerged. The latest housing price guide for 2008 from
the IVD (Immobilienverband Deutschlands) claims that
German-wide price gains of 2% will be visible, with a
new assurance that housing prices have stabilized and
have re-reached the level of 10 years ago. Munich
maintains its status as Germany’s most expensive city
with average square metre prices of €2,010, and in
common with larger cities, rent levels increasing in those
areas closest to the city centre. The average rent level in
Munich has now reached almost €11 per square metre.
An April’08 article in Munich’s daily paper, Die
Tageszeitung, also claims consistent price increases,
although again specific inner city areas are enjoying the
best gains

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%). Deutschinvest
************************************************** ****************

The figures that you give here are well under German inflation for the last 12 months, and so certainly DO NOT constitute 'upward pressure'.
Prices considered to be stable over the last 12 months in Germany...at best.

Neustria

Yes 2% is below inflation. I suppose the point is that the 2% figure is an overall German average, and hides hot spots (as well as the very weak areas). Much of rural Germany (esp. in the East) must be seeing negative growth (poor demographics and also movement of people to employment centres), which means the hot spots are working hard to give an overall positive result. Due to poor reporting it's tough to get good and reliable localised mkt price data, but German cities, such as Munich/Berlin, tick all the right boxes and in the long run look a very good buy at the moment.

Yes, for the most part I agree with you Munich Buyer, and in the current international context, an overall market which is holding steady is doing alright. Germany should fare better than others in a downturn because prices have not risen nationally as much as in other nearby markets (UK, France, Spain, etc.), and the economy is holding up pretty well also, despite the strong euro. I still think though that it is too early to step in now, because there are many uncertainties still out there and some could lead to unpleasant surprises. The exchange risk for those outside of the eurozone is one of several.

Neustria