Germany’s capital is often cited as a leading European city for property investment. Indeed, according to PWC Real Estate Investors Survey 2018, the Berlin residential market is ranked as the top property market for investment in Europe among large German and European cities.
As an established and safe property hotspot, with good quality housing at an incredibly attractive price when compared with other major European cities, Berlin is attracting the attention of investors who wish to take advantage of the opportunities of the potential for growth within the market.
Berlin benefits from a strong economy. It has 3 million inhabitants and 250,000 new arrivals expected before 2030, who come to the city to enjoy a high standard of living, lower costs when compared with other capital cities, and of course a thriving jobs market – unemployment in the city is at a record low, while wages have increased significantly in previous years.
With a thriving startup culture, Berlin has started to emerge as a leading tech hub for Europe thanks to its affordable costs, generous financing opportunities for new business, and also a large talent pool.
Strategically, Berlin sits at the heart of Europe’s road network, and is easily accessible from the world’s major cities, making it an ideal location for many large corporations.
Tourism in Berlin
One of the leading European destinations, Berlin is ranked third after London and Paris.
Thanks to its vibrant nightlife, rich history and culture, the city attracts around 13.5 million visitors every year and is home to over 33 million overnight stays per year. Visitor numbers grew 5.5% in 2018, and are expected to continue to increase.
It’s also an incredibly attractive destination for business travel and is ranked as one of the top 4 cities for international conventions, hosting around 12 million participants at 143,390 events in Berlin.
Why Invest in Berlin?
For many investors, the safety of the Berlin property market is a primary reason to include a Berlin investment in their portfolio – Berlin has consistently performed well with the average rise in Berlin property prices since 2004 at 115%.
Additionally, Berlin is very much a rental city, with home ownership at just 16%. The large influx of new inhabitants has put pressure on a market where new development is low, meaning that the demand for high-quality rental properties is high, and also that there is good liquidity within the market for those wishing to sell.
Income tax regulation in Germany is investor friendly, with the potential to benefit from total tax relief after 10 years of a property holding period, and most running costs being deductible.
While property prices in Berlin have of course increased, there are still incredibly attractive when set against many of Europe’s other capital cities, and with a large population increase forecasted, growth in prices will likely continue to rise.
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