Berlin real estate market is ranked for the third consecutive year as the best property market in Europe for investment. In the same ranking, we find Copenhagen in 6th position, Barcelone in 16th position, Paris in 17th position while London is only at the 27th position (out of 30 major cities) due to Brexit process and its potential impact on economy and currency. By investing in Berlin, one benefits from a unique combination of investment safety, strong housing demand and attractive property prices. Berlin is world known for its urban dynamism, quality infrastructure, growing digital economy and booming tourism sector.
Berlin real estate investment combines security, strong return on capital gain and long term positive prospects.
Security of investment
In addition to its political and historical importance, Berlin began in few years Europe’s start-up capital and has impressive growth rates in many sectors such as infrastructure, services, digital economy, tourism and also real estate. Investing in real estate in Berlin is first of all investing in Germany, the second exporting economy in the world and the leading economy in Eurozone. It represents today simply the most safe placement of the Europe.
Advantageous Tax scheme
Investing in Berlin real estate allows to benefit from the unique advantage of a total tax relief on resale after 10 years of property holding period. Interest payments on mortgages as well as all management costs are fully relieved from rental income. A property amortization scheme of up to 2,5% of property purchase cost (including agency fees, notary and registry costs) allows to have tax deductions pay quite low tax on the rental income.
Pricesare strongly increasing in Berlin with 8-10 % increase per year with up to 15% in some areas of the city. This trend is expected to continue due to the high demand of rental and purchase and the economic dynamism of the city. Also foreign investors, both individuals and institutional investors are showing a tremendous enthousiasm for real estate in Berlin which made the investment volume tripling witin 2-3 years to reach a current rythym of ca. 10 billion euros per year.
Advantageous financing conditions
Berlin real estate market offers attractive investment opportunities and also optimal financing conditions at low rates, including for foreign buyers. The mortgages generally offer flexibility in the rythm of repayment and the interests are deductible from rental income. The property mortgages in Berlin for non-resident buyers are generally around 50% of the purchase price.
Lowest real estate prices among European capitals
Berlin property prices are the lowest amongst all major European capitals. The proprety prices in central Berlin is 2-3 times less than Paris and 4 times less than London for a comparable property and location quality. Berlin is also ranked as the second most active real estate market in Europe (in terms of total transactions volume).
High demand & lowest ownership rate
Berlin has the lowest ownership rate in Germany with less than 20% of home-owners compared to 52% average in Germany, which sustains the long term high housing demand. Berlin's population is growing with around 50 000 each year while the new housing offer is limited with only around 10 000 of new apartments per year. That also explains the extremely low vacancy rate in the city of less than 3%.
Quality of life
Berlin was ranked the 3rd best city in the world in terms of quality of life by Monocles’ Quality of life survey. Berlin is known for its safety, developed infrastructure, natural spaces and parks (35% of Berlin city is composed of parks, lakes, rivers and gardens). Berlin is also worlwide appreciated for its dynamic cultural life and represent a major destination for artists.
If you are interested in more information about real estate in Berlin (property prices in Berlin, rentals, types of buildings, purchase process, investment properties, current opportunities...) please, do not hesitate to contact our Berlin real estate agency for a comprehensive consultation.
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