Berlin is one of the most popular cities in the world for property investment. It is likely to stay that way for a long time to come. There are several factors driving the popularity of investing in Berlin property.
Many different people are drawn to this city of 3.5 million people. In fact, a good share of people living in Berlin was born outside of Germany. There are many different reasons that people find themselves drawn to the city, but one of them is the economy. People from over 196 countries live and work in the city.
Economy and taxes in Berlin
Germany has the fourth largest gross domestic product in the world, and Berlin is its capital city. New job creation means that the unemployment rate is extremely low. In October 2018, the city set a new low for unemployment rates.
People running start-ups often love Berlin. People with degrees or experience in technology are abundant. There are also plenty of opportunities for people in the financial field. The city has the highest concentration of academics and researchers in the nation, and one of the highest in the world. Germany's Business Immigration Service makes it easy to move to the city and work or operate a company. Aggregate employment rates have increased by an average of 30 percent in the last decade.
On top of having some of the lowest real estate prices in the world, real estate taxes in Berlin are incredibly inexpensive. The base tax rate as of 2018 is just 2.6 percent. The highest property tax rate in the city is only 10 percent. This rate applies only to the first home owned that was built before March 30, 1924.
If you choose to not move to Germany, then you may need to pay taxes on your property if you choose to rent it out. You may be able to just pay the tax in your own country if they have an agreement with Germany. In Germany, your mortgage payments are written off your rental income. You may also get capital gain tax relief after 10 years.
Berlin real estate market supply
Regardless of the type of real estate, property in Berlin is in short supply. It is estimated that the city is currently at least 130,000 apartments short, and the Berlin Senate estimates that shortage will grow by at least 50,000 units over the next 15 years. The city's government has vowed to help investors build over 200,000 homes in the next 15 years with 50 percent of those reserved for people who are able to pay average rent.
There are many areas of Berlin where people are choosing to build new homes and apartment complexes. Yet, the difference between supply and demand continues to broaden with more housing needed than is currently available. That is likely to continue to drive prices up for the next many years, so now is a great time to invest in real estate in Berlin.
It is still possible to find attractive opportunities to buy a property in Berlin, especially with a mortgage-funding. With more people than ever before choosing to move to the city, this may not be the case for long. On the average, you can buy three houses in Berlin as cheap as you can buy one house in Munich. It is not expected that cheap housing will remain in Berlin, however, so now is the time to get involved as rentals and real estate prices continue to climb year-over-year. There are many reasons that Berlin makes a great place to invest in housing. If you need assistance, then contact an international real estate agent in Berlin like First Citiz. We help walk many people from all the world through the process of buying or selling housing in Berlin.