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Berlin boost sees investment prospects soar

March 16th 2018

by " Property Week", Feb 12, 2018

 Almost 30 years ago, the city was divided in two by 112km of concrete. Now, Berlin is one of the most vibrant cities in Europe: Unemployment rates have dropped to record lows, employment growth remains strong, and people are flocking to the city from elsewhere in Germany, Europe and beyond.

To assume the city’s growth is anywhere near plateauing is to ignore the facts. In 2016, Berlin saw its strongest population growth since reunification, with the number of its inhabitants increasing to 3.9m. 2017 is likely to have seen an estimated growth of between 40, 000 to 50,000.

Berlin now has the second largest population of a capital city in Europe, yet it is still 5m behind London. As one of the most flourishing economies in the Eurozone, it is unlikely that this growth is about to slow. In fact, the city is expected to attract 250,000 new inhabitants by 2030.

A city with a growing population needs homes. Still, in Berlin’s unified history, there has been little privately financed construction and the city’s regulatory environment remains challenging. There is not enough land being released for new construction and there is a large gap between permits being issued for new construction and homes actually being built. 13,700 homes were built in 2016, but with the city’s population growth, 20,000 homes per year are required to meet the city’s housing needs. This shortage of homes is most acute in the medium and lower price segments.The imbalance between supply and demand has caused the value of properties to increase.

According to a PwC report, Berlin comes first place out of Europe’s leading cities for overall investment and development prospects in 2018. With the city becoming a hotspot for the technology sector, the number of young professional tenants seeking mid-market properties is unlikely to decrease for several years to come.

Although the regulatory backdrop remains incredibly restrictive, with a supply gap of around 80,000 expected over the next few years, it will only be a matter of time before the Senate will have to incentivise social housing projects. With Berlin’s economy growing as it is, those travelling to the city will need places to live in order for it to continue to flourish.

In Germany the procedure of buying a house is easier than in most European countries.Germany in general has no limit on foreign ownership. You only need a valid passport and enough money to buy property. Munich, Berlin, Frankfurt and Hamburg are the top relocation destinations in Germany for both locals and foreigners.

With demand increasing all the time in cities like Berlin and Frankfurt, being equipped with as much local knowledge as possible is essential. This is where Berlin Estates comes in. Offering advice and support to buyers and sellers alike, the Berlin-based real estate agency offers a truly unique service, promising speed, transparency and expertise.

As the Berlin real estate market becomes increasingly competitive, the need for professional assistance becomes ever greater. By connecting buyers and sellers from all over the world, Berlin Estates helps real estate investors to act fast in a dynamic market.

For more about Berlin Estates and how working with a professional agency can assist with international real estate investments, check out our Company Profile