Which is the Greek’s and Italian’s shelter? A property in Berlin

In Berlin, the interest in small and medium investments has kept on growing mainly by low housing prices in the German capital in recent years. It has also been the safe place for many foreign savings, and mostly Spanish, Italian and Greek. More and more people are interested in investing abroad and buying properties with a yield of 3-4% annually, according to Elena Noman, a real estate agent in Berlin. This is a fact that a few years ago was unthinkable.

These are primarily middle class people, who are usually teachers, young couples, architects, doctors, lawyers, but also employees and retirees. They all share the conviction that Germany is a safe refuge and that the brick does not betray. They know that Berlin is a city in which art and property prices are much lower than in London or Paris. In most cases, the customers do not speak German, and some have not even been in the capital yet. They are mostly Spanish, Italian and Greek, encouraged by the crisis to preserve their savings. This is the profile of the new small investors in property in Germany.

Actually, the data confirm the impressions. According to a survey developed at the end of 2011 by a leading portal in Germany, the demand from abroad has significantly increased last year. The focus is particularly in the capital, Berlin, and economically stronger regions such as Bavaria, Baden-Württemberg, Hesse and North Rhine-Westphalia.

Real estate agents were interviewed and confirmed a significant increase, particularly in the countries affected by the crisis. "Increased demand can be attributed both to the critical situation of the construction sector in the affected countries with the consequent emigration to Germany, as an overall increase in foreign investor interest" says Ulrich Gros, Immowelt AG’s president.

According to the study conducted by this internet portal, the trend is reflected in particular in searches on the German portal. Searches performed in late 2011 from Spain were 475% higher than the previous year. They increased also around 351% from Italy and by 147% from Greece.

The Berlin estate agents confirm the trend. In recent years, the interest in small and medium investment has not only grown, according to Elena Noman, Spanish co-founder of the agency "BRICKBeRLIN". The year 2011 was a good year and for three years the activity has just grown" according to Elena Noman. She shares the agency with a partner and they operate almost exclusively with Spanish and Italian with an approximate ratio of demand of about 40-60% respectively. "The Spanish tend to look for cheaper prices, between €60,000 and €150,000. While the Italians dare higher investments, i. e. they are able to pay what they paid for a flat in Italy some years ago, that is, between €200,000 and €300,000. "It is clear that the new trend is favourable for agents who speak other languages, since they do the go through the German bureaucracy instead the customers themselves.

As Elena Noman says, 70 % of your customers have never been in the capital city and they may not do it anyway. They buy to invest, they ask for some pictures of the surrounding streets to get an idea about the neighbourhood, and then they just rely on a "Sondern Hausverwalter", that is basically a special administrator for housing and tenancy, that represents them in every way and keeps them informed about the community, receipts and payments. The buying process takes about three months. "The Spanish generally prefer to buy homes that are already leased; however, Italians tend to prefer empty flats to rent them for short periods to tourists," she says. Lately more and more people are interested in buying properties that give between 3 and 4% of annual net yield, even though if investing money abroad has been unthinkable a few years ago.

There are many other important factors. In Italy, Spain and Greece, the new governments have introduced or are about to introduce new property taxes that saturate the domestic property market. Monti 's government, with the measure of "Save-Italy" has also introduced a 0.76 % tax on real estate purchases abroad. The measure refers to any intended use and the tax "is determined in proportion to the type of possession and the months of the year in which possession has been lasted". The percentage is calculated on the purchase price or alternatively, "according to the market value at the place where the property is placed. "This type of IMU without borders must produce a yield of €98.4 million in the next three years.

Germany is considered the safest city in a long term. The situation in Berlin is special: it was bombed, then divided by a wall and when it started to normalize and recover was in the 90s. Since then, the prices have risen, but they still cannot be compared to those in other capitals. Elena Noman, who does not sell new apartments, assures that average prices are around €2,500 per square meter. While the prices of new apartments (new construction) are higher, that means around €3,500-€5,000 per square meter.

Real estate agents in Berlin have no doubt: Despite turbulence in the euro area and EU policies, the economic situation in Germany is one of the most stable in Europe, according to Jürgen Michael Schick, the vice president of the German Association of Real Estate Agents (DIV). Among the factors that make the German market so attractive are the low interest rates and moderate level of prices in general.

This phenomenon is favourable to real estate agents in the world and all related activities in Germany. However, this evidently turns against the citizens of the German capital, who are generally not used to owning their homes (in Berlin only 14% of the population owns properties to live, while in the rest of Germany around 43% of the population owns the house).

In an article by the writer Tanja Dückers, recently published in the newspaper "Süddeutsche Zeitung", she denounces the risk of "a new culture of hatred" that is taking place in Berlin, and fed by the gentrification that is directed not only against the foreigners in general, but to the 'new arrivals', also from the rest of Germany, often considered responsible for the change in neighbourhoods that were once alternative and for the general price increases.

Source: article published by Laura Lucchini on January 24, 2012 in http://www.linkiesta.it/comprare-immobili-berlino