Analysis: Arab absence of real estate investment opportunities in Germany Politics and Economy -

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For the tenth year in a row, the surge in real estate prices in Germany continues at annual rates of between 4 and 10 percent or more in cities annually. The main cities are Berlin, Munich, Hamburg, Frankfurt, Cologne, Stuttgart and Dusseldorf. The capital Berlin is clearly the most affected by the rise, which has more than doubled since 2009.

Until that year, the price of the new three-room apartment was between 130 and 180,000 euros, depending on the region and the level of equipment. Today the rate is 300-330 thousand euros and above. Except in the center of the city where prices are much higher than that in the government district and its surroundings.

In the area of ​​independent family housing with a small garden, the cost of an apartment of 130 to 140 square meters is about 400 to 500 thousand euros, which means that in 2007 prices were about 140 to 180 thousand euros for such housing has more than doubled at the moment. In terms of rent, prices have also doubled and the rental rate for a three-room apartment has been around 1,200 to 1,500 euros and above for an average of 600 to 700 euros until 2008.

Why Berlin prices soared?

Until the end of the first decade of this century Berlin was full of apartments and houses for sale and rent at low prices can not find one in any Western European capital. Where prices were half or less than half that of other Western capitals such as London, Paris, Amsterdam and Copenhagen.

However, the continued transfer of most of the institutions of the federal government, diplomatic missions and economic unions from the former capital Bonn, along with the influx of tourists, especially the Europeans revealed many rare opportunity to own and invest in the German capital. Hundreds of German and European companies, led by SAP, opened offices and branches in the city. Thousands of creative young people have also poured in to create thousands of small and emerging companies, some of which turn into important players in the worlds of Internet, communications and e-marketing, such as Zelando e-commerce, FreeHoop Digital Shipping and Relair Online.

Meanwhile, European and international real estate funds such as Grand City Properties, IDO Properties and Deutsche Fonin have bought thousands of apartments, apartments and offices, enabling them to partially monopolize the market and impose rapidly rising prices. On the other hand, the government in Berlin, both domestic and federal, has not kept up with demand by building new housing, housing and property.

Berlin, Potzdamerplatz (picture-alliance)

Berlin is a world-class city where culture, construction and life are less expensive than Paris, London, Rome and Madrid

Germany is still cheap compared to its neighbors

Demand for real estate is increasing in Berlin and other German cities, not only because of increased tourism and immigration, especially after the influx of refugees between 2014 and 2016, but also because of lower prices than in Britain, Switzerland, France, Austria, Ireland or the Netherlands.

Prices for apartments there are 40 to 100 percent higher than in Germany. Which is driving international real estate companies to invest heavily in the German property market. Many citizens of the European Union also have the right to own, rent or use apartments and housing for personal use during holidays and vacations.

The Arabs living in Germany only managed to take advantage of the opportunity at the right time and bought an apartment or housing for multiple purposes. However, unlike the residents, Arab businessmen and investors did not enter the German property market significantly.

Excluding this is the beginning of the millennium when business people from the Gulf, especially from the UAE, went to buy a number of properties in Berlin, including a Hilton hotel and office buildings. However, these properties were disposed of, especially after the outbreak of the global financial crisis that hit the emirate of Dubai later.

Opportunity for Arab residents and investors

In light of the surge in prices over the past 10 years, many wonder whether the real estate investment train in Berlin, especially in Germany, is too late for ten years. The answer to this is likely to tip the line that the train is not over for several reasons.

Deutsche Welle Ibrahim Mohamad (- / P.Henriksen)

Ibrahim Mohamed: Real estate investment in Germany has become more feasible than ever for decades

First and foremost, the real estate price waves in Berlin and Germany are often 30 to 50 percent lower than in Europe. With waves of immigration and continued asylum and open the door to the migration of young foreign talent because of the need of the German economy will increase demand and prices will rise.

Their flare-up will further weaken the ability of the German government and state governments to take effective measures to limit the supply's inability to cope with rising demand. If this is a problem for people with limited and average income to find the right property, it is an opportunity for residents of the owners of funds and for Arab investors outside Germany has not been exploited.

If they invest real estate in Germany for the foreseeable future, their investment returns look better than in London and Paris, where billions of Arab capital have been invested in real estate there. Real estate investment rates range from 6 to 12 percent a year in cities such as Berlin.

This is due to its ability to attract more companies and people annually as it is a large city with a population of less than 4 million, compared with that in London and Paris. According to indicators and expectations that the population of Berlin to a rapid rise, especially as there is an increasing demand for migration by the skills of the net around the world.

Ibrahim Mohamed

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