History has not been in favour of German real estate investment, as the fallout of reunification was sluggish for the property market for a long period of time. However, the German property market is back with a vengeance and is gathering momentum on a daily basis! It took the Soccer World Cup of 2006 to revive the fortunes of the laidback property scenario within the country.
Germany a late entrant in the real estate business is destined for higher plateaux. Though the country is considered as much more technologically advanced than most of its European counterparts, it is the housing segment that requires cosmetic work to bring it back to the forefront of the world's property stage.
Salient Features of Germany from an Investment Point-of-View
Any prospective property investor must ponder over the following features of the country before making up his mind -
- The reunification of Germany in 1990 was a welcome global development. But the country had to pay a huge price in terms of a buckling economy. The positive vibes about the property market in Germany is a recent development. Historically, the country was a nation that hardly attracted any offshore investments. But modern Germany has not only survived, but is now also emerging as a strong and vibrant European economic powerhouse.
- Since German property demand is of recent origin, the experts have already predicted big things for the country's real estate market, and the time for investing here is now, as the prices are on an upswing of late.
- Most Germans have traditionally preferred rental accommodation over owning a house of their own (which is just 43% of the German population). This represents a great investment opportunity for overseas investors who wish to earn handsome rental income from a decent property in one of the growing cities of Germany, like the capital city of Berlin for instance.
- The country is not too high on the tourism map of Europe. However, this doesn't mean that Germany has any dearth of tourist spots. The rich history of this country holds an obvious edge over some of the other countries in Europe. It's just that successive governments were too busy to promote tourism in the wake of economy revival. But the potential for this sector is immense and the country is widely believed to welcome millions of visitors annually in the coming years.
- Germany's technology potential is widely respected all around the world and it is a powerhouse in the electronic goods segment. This has lent added weight for the German economy to prosper. An improving economy also means a consistent drop in the unemployment rates within the country. The nation's industry is also giving full support to bolster the sagging fortunes of the country's economy. Germany has emerged as the world's largest exporter by volume, with nearly a billion dollars in exports in 2006, and with a trade surplus of over $200 billion in the same year.
- The capital city of Berlin has emerged as the best place to invest in Germany. With money giving ample fuel to the economic health of the country, the capital city is the obvious choice for real estate investors from around the globe. The government has awakened to the importance of foreign investment in the country. Resultantly, there has been a surge in property rates in Berlin. As an indicator to the British investors, apartments in Berlin start from £35K, and depending on the size, location, and other considerations, the price may go up to as far as £200K.
Legal Position of foreigners owning property in Germany
The German government has not imposed harsher limits on the foreign ownership of property in the country. Non-Germans can also buy, own and sell an unrestricted quantity of land and homes. They can also hold property as landlords, and even develop property after satisfying certain simple rules and regulations. Buyers from EU countries have an added advantage of access to residency and labour rights as set out in EU law. The Non-EU investors must consult the local embassy regarding their rights in Germany.
A legal professional is required to carry out all the paper work for the real estate investors. This is because most of the administrative work requires to be executed in German, and despite your best knowledge of the language, you'll be ill at ease while handling the local authorities.
The Banks are also offering low interest rates on mortgages. Most banks will lend up to 70 per cent of the purchase price, though you will have to fulfill certain conditions. The maximum mortgage terms are 30 years on a rate of fixed interest.
Any property purchase in Germany is susceptible to Property Tax as per different rules of the different regions. However, the rates are not too prohibitive. Even the rental income is chargeable under Income Tax. It's better that you hire a local solicitor to guide you through the possible tax minefield.
In addition to offering property for sale in different locations in Germany we also have at your disposal a list of other useful tools to help in your decision making when considering buying a property in Germany :
- Buyers Guide - A useful article on the buying process when buying a property in Germany
- Country Guide - A detailed guide to Germany including information on health, economy, business, travel, things to do, excursions and much more
- Locations - A current list of locations that have property for sale in Germany
- Airports - A guide to the main airports in the country, where they are and how to get there
- Attractions - A list of popular tourist attractions
- Estate Agents- a directory of estate agents and a list of real estate agents selling property
- News Articles - A useful resource for learning about the country, what's happening and useful information
- Shopping - A directory of useful resources to assist in your purchase or travel including; Flights, Accommodations, Car Hire, Mortgages, Holidays, Lawyers and much more.
- Useful Resources - a list of useful resources that you might find of general use.
