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Germany: Investment Potential 2008

Property investors in Germany can be reassured that tourism, the economy and property prices are all experiencing sustained growth, returning to pre-9/11 levels. There is a consensus that the property market in Germany is on the verge of change and that it holds significant investment potential.

Germany - Prime Investment

Knight Frank Residential Research has in the past advised investors to look at countries lower down the popularity list and see where the next upturn might be. Those who followed their advice and invested in property in Germany are beginning to see the rewards.  There has been a general market recovery and the liberalisation of mortgage products is encouraging growth. For property investors in Germany, the strong rental sector is an area of interest, particularly in the key cities of Berlin, Frankfurt and Hamburg. In Berlin, rental yields are around 6% for apartments and even higher for large apartments. Frankfurt and Munich are also averaging around 5%.

Economic Growth in Germany

Potential investors in Germany will be pleased to hear that the economy is seeing the first fruits of continued government efforts to control the economy. The Times newspaper reported that the German economy is the strongest of the three largest Eurozone economies. The country has an affluent and technologically strong economy. It is the fifth largest in the world and GDP growth per capita was 3.1% in 2006 and 2.6 % in 2007. Unemployment has been falling steadily for more than two years and stood at 7.3% in March 2008.

German Tourism Recovery

Tourist arrivals in Germany were strong during 2006 and this continued into 2007 with the German DRV travel association confirming that they had successfully achieved pre-9/11 levels of €20 billion in tourist revenue. The future for the property investor in Germany looks bright with recovery all round, indicating that renewed interest in the German property market is already beginning to take effect.