If you’re looking for a laid-back European city with loads of history and plenty of rental potential, Berlin could be the place for you, finds Rachel Newcombe.
The German city of Berlin has been attracting foreign property buyers in recent years, but why is it popular and is it still likely to offer good investment potential? Located in north-east Germany, Berlin was previously the capital of East Germany whilst the Berlin Wall was in place, and became the capital of the country when the wall came down and reunification took place. With a population of around 3.4 million, the city has evolved into a vibrant and cosmopolitan place, in the heart of Europe.
“Berlin usually surprises first time visitors by how spacious, laid back and green it is,” comments Neil Corteen, from Berlin Profile. A similar view is shared by Seamus McConville, from Property Invest Europe, who says, “It’s a fascinating city to visit, not only because of its history and architecture, but also because of its people. It has a unique feel amongst world cities.”
Foreign interest in Berlin property has grown in recent years, with buyers choosing both older properties and new apartment developments in the centre of the city. The company Buy Berlin, for example, say they’ve sold, “in excess of 200 properties to UK, Irish, Italian, French, Spanish, Russian and Asian clients.”
Whilst it’s harder to find houses for sale in the centre of the city, there are more available on the outskirts, in leafy suburban areas. Where Berlin differs from some other cities, especially the UK, is that a lot of people rent property, as opposed to owning it. “Berlin has a low percentage of ownership of property. About 87% of Berliners are tenants,” says Heinz Krüger from Nordstadt Immobilien. This is good news for anyone considering buying to let, as there is generally a consistent need for rental properties, many on a long-term basis.
What’s also good is the price of homes. “Property prices in Berlin are well below any other major European city and the average gross yields are higher,” explains Lorna Morgan from Buy Berlin. “A good studio apartment can be found for around €50,000 to €70,000; two bedroom apartments will cost from €100,000 to €200,000+.”
As with any city, the districts vary in popularity and price, with some more favourable than others. “Central eastern districts remain prime places to buy, like Mitte, Prenzlauer Berg and Friedrichshain,” explains Neil. “Some buyers opt for the more established and grander central western districts of Charlottenberg and Wilmersdorf. The district of Neukölln, where rents and purchase prices are still low, suffers from an image problem within the city, but has been receiving a lot of interest from younger residents and buyers in 2008.” As far as rental interest goes, a recent residential report from Jones LaSalle showed that Friedrichshain and Kruezberg have shown some of the largest rental gains in the last 12 months.
Read the full article in our February 2009 edition.
