Real Estate Investing Berlin
An important building block for asset accumulation and old-age provision
Would you like to invest your money in real estate because real estate generates better returns in the long term? Then talk to us. Our experts will advise you on all important questions concerning investment apartments:
- How much equity do you need?
- What rental and price developments can you expect?
- What are the monthly financial expenses and income?
- Which possibilities of direct real estate investment are currently available and suitable for you?
An apartment as a capital investment is a simple and secure and thus a long-term form of asset accumulation and retirement provision.
Therefore, we look with you into the future, at your life planning, forecast income and expenditure and estimate the sustainable potential of the location. In short: We do everything we can to ensure that your capital investment gives you lots of pleasure and no sleepless nights at any time. The personal consulting service of ZIEGERT Immobilien helps you to make the right decisions.
Is Berlin suitable as an investment location?
In principle, the investment opportunities in Berlin are positive. Apartments as capital investments are in high demand here. Berlin is growing sustainably – both economically and demographically. The number of households in Berlin has increased significantly as a result of the strong influx in recent years.
Nearly two million households were counted in the capital in 2015 (+ 1.79 percent compared to the previous year), around 90,000 more than in 2012. This is also attributable to the growing number of single-person households. The predominantly young and often well-educated new residents appreciate the high quality of life in Berlin and ensure a strong and sustained rise in prices on the housing market. In 2016, for example, rents on offer in Berlin rose by 5.6 percent compared with the previous year.
At an average (median) of 9.00 euros per square metre (cold), the apartments on offer were thus around 50 cents above the rent on offer in 2015. The dynamism is particularly strong in the scene quarters at present. The Neukölln district, for example, has seen rents rise by 17.1 percent. With an average of 9.47 euros per square metre, rents in the former problem district were above the Berlin average for the first time.
To the Capital Investment Report | Residential properties & low interest rates
Alternative to the savings book - supplement of the age precaution
Other reasons for the historic price jumps are the comparatively low level of construction activity, increased international interest and low interest rates. Only 10,000 apartments were built in Berlin in 2015. The demand is around 23,000 apartments and the difference accumulates over the years.
The potential arising from the gap in supply that has existed since the mid-nineties was first recognised by American private equity companies and only in the course of the financial crisis by private investors.
Since the beginning of the 2010s at the latest, apartments have increasingly been purchased in Berlin as capital investments as part of private old-age provision.
Buyers are benefiting from the current low interest rates for ten-year loans: Currently, we have the situation that the income from monthly rental income covers the interest costs of a residential property purchase even if it was predominantly financed with a loan. The possible additional redemption then functions like a savings contract, at the end of which there is a considerable asset value and growth.
Real estate owners have the larger assets
A study by the Research Institute empirica has shown that Apartment owners build up six times as much wealth as tenants. The researchers have investigated how the capital formation of tenant and owner households develops over time under otherwise comparable economic conditions. It turns out that both groups have very different asset formation biographies.
Tenants and homeowners aged between 50 and 59 with a monthly net household income of between 1,700 and 2,300 euros were considered for the analysis. Property assets (owner-occupied flats and apartments as capital investments), financial assets (securities, endowment insurance, building saving contracts and savings deposits), but also liabilities from open loans are included in the balance sheet.
According to empirica, on the “eve of retirement” the bottom line for homeowners was not only the average value of their property of 152,000 euros, but also net financial assets of 45,000 euros.
Tenant households in the same income group, on the other hand, only have an average net asset value of 24,000 euros. In addition, tenants have 6,000 euros in real estate assets, which is the value of rented properties. The low average value is explained by the fact that only a small proportion of tenant households own apartments as capital investments. Overall, homeowners up to the age of 60 build up almost six times as much wealth as comparable tenants.