Nery Alaev

German real estate: what are the prospects? 

Nery Alaev writes about German real estate.

In 2015 it became apparent that the real estate market in Germany, especially capital Berlin and other major cities such as Munich and Cologne, became a major investment prospect for worldwide investors.

Today, I’ve decided to enquire as to whether 2016 is a key year for the market in Germany and whether the year ahead will bring more positive news.

Strong growth

Berlin houses - Nery Alaev

Housing in Berlin

I’ve written before about positive stories regarding the German real estate market, such as the purchase of Potsdamer Platz and the growth of the Mitte district – these articles of mine have pointed towards growth in the capital thanks to outside investment from investors hailing from countries such as Russia, France, the USA and the UK as well as outside of Europe.

As well as my own opinion, there are articles that highlight Germany as a positive investment due to the country’s macroeconomic position when compared to other European economies that have been struggling in recent years, such as France.

As well as this, recent articles point towards more investment for the country. For example, a recent Reuters article highlights how a major German property developer intends to invest €5bn in the country over the next five years.

The article states:

“Germany’s real estate sector has grown in recent years and investors are betting on a further rise in property prices in Europe’s largest economy, which have lagged many other euro zone countries for years.”

The statement clearly points towards a strong market in Germany.

My advice

Because of this, I would advise a positive approach to German real estate – with macroeconomic factors considered.

For example, recent turbulence in the European stock markets, twinned with the ongoing refugee crisis, may affect real estate in Germany during 2016. One must consider this, then make a decision.

Nery Alaev

Nery Alaev is the current Director of ESN Investments GmbH, which engages in acquisition and development of commercial and residential property in Germany and Austria.