Why do more Hong Kongers Invest in Real Estate in Berlin?
Berlin
In the past few years, investors from all over the world, including residents of Hong Kong and China, are choosing to look for real estate opportunities in Berlin. The price for a 3-bedroom apartment is around $127,590 and the return of investment can reach up to 3-times more than the average return in Hong Kong. The companies that closely accompany the buyer starting from locating the property until renting it, make purchasing properties in Berlin into doable and profitable deals. In other words, there’s no need for being an expert in real estate in order to enjoy the advantages of being the owner of a profit yielding property in the German capital.
What turns Berlin into such an attractive investment?
Price
While real estate prices in cities such as Paris and London skyrocketed, Berlin stands out with its real estate supply and prices. 25 years ago, the east part of Berlin was in a poor condition, but even after years of construction and development, the price for square meter stands on 2,500-3,000 Euros – about a third of the price for a square meter in London or Paris. Today, the price of a 35-50 square meter apartment in Berlin in a quiet street near a central avenue is between 70,000 to 90,000 Euros.
Demand
“Because of Berlin’s history, Germans in general and Berliners in particular tend to rent apartments much more than buying them,” explains Guy Adelsburg, sales manager of Berlin Estate Company. “Based on data of the Central Bureau of Statistics, 42% of apartments in Germany are occupied by their owners while in Berlin only 15% of residents own the apartments they live in. with such a high demand, property owners can ask for extremely high rent.”

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Potential Yield
"Many real estate experts predict that Berlin will soon minimize the price gaps with other leading European cities. “Berlin is going towards a decade of rising real estate prices. Anyone buying a property now will enjoy a brief window of opportunity. The situation in Berlin today – in regards to the growing waves of immigration and its residents’ cosmopolitan character – is very similar to Manhattan back in the 1980’s and 1990’s. It is well known that anyone who bought an apartment in Manhattan back then made a huge profit. Without a doubt, this is about to happen in Berlin as well." said Adelsburg.
Adelsburg has found an additional way of maximizing potential yield from buying a property in Berlin: “Before purchasing a property in Berlin, it is very important to identify its potential and the option of improving the property.
Many properties in Berlin can be upgraded by making architectural changes that will bring a maximal utilization of the residential space. An interior designer can make the apartment look very attractive. These kinds of changes are meant to improve the apartment and to increase its value when selling it or increase the return of investment when renting it.”
The real estate market is a reflection of the major changes that Berlin is going through in the past few years, including the increasing migration into the city.
A Once in a Lifetime Opportunity
The fact that apartments’ prices in Berlin are within a reach is not going to last forever. The government of Germany is aiming to promote Berlin and make it into the vibrant center of the German economy. Therefore, it is working towards moving government institutions from Bonn to Berlin, a process that has been going on gradually in the past 5 years. In addition, building luxury apartments in the city center - currently at its peak - might increase prices, which will make finding a good real estate bargain much harder in the near future. It will result with the increase of tens of percent the value of properties of any current buyers. Also, unlike other cities, an average rental lease in Berlin is signed for a 5 years period and not one or two years. The rent for an apartment populated with old-time renters is 6 Euros per 1 meter and 10 Euros per 1 meter for new residents. These rates are still lower than rates in Munich, Kellen, Frankfurt or Hamburg, but real estate experts predict that the continuous flow of young crowd to bohemian and chic Berlin will result with the increase of the demand for renting small apartments.
Another advantage is the possibility of renting a property through the assistance of management companies who have local branches in many countries, including Hong Kong and Berlin, and that gather under one umbrella all services needed for a potential buyer such as locating a property, assisting with bank financing in Germany, managing legal procedures, coordinating interior design and managing and renting the property.
“The idea behind purchasing a property through a company is to maximize profits and minimize risks. Thanks to the many years of our experience with the real estate market in Berlin and with the help of our professional team, more Hongkongers realize that there’s nothing to worry about when it comes to investing overseas and that they can enjoy high profits from investing in real estate in Berlin,” states Adi Keizman, the founder of Berlin Estate. To conclude, if you have an available sum of money, don’t let it sleep in a bank account, while you can, in a careful and solid manner, make a nice and stable return through buying real estate in Berlin.
Real estate experts predict that the continuous flow of young crowd will result with the increase of the demand for renting small apartments.
© 2015 Dynasty Capital Partners (Hong Kong) Limited
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