Property Locations in Berlin

Property Locations in Berlin

Monday, 8 August 2016

Real Estate Market in Berlin and Germany - Outlook After Brexit

The outcome of the UK referendum on membership in the European Union (i.e. the vote to exit the union known as Brexit has led to many discussions and wild speculations regarding the impact this will have on the economies of the UK and indeed the remaining EU members. Most statements and predictions are based more on emotions than economic facts but emotions have a significant impact on market developments as we see demonstrated by the global financial markets every day.

A clear economic downturn in the UK and political reactions to this development have already manifested themselves.

Alongside financial services, the property market in the UK has been a destination for international investors. There are uncertainties linked to Brexit with regard toall aspects of how and when the procedures will start and what the impact on investments will be. There already are negative risk aspects attached to investments in the UK without any decision actually having been made. This will cause a diversion of investments to other destinations in Europe. On a city level the winners will most likely be Frankfurt, Berlin, Paris, Luxembourg, Dublin and Amsterdam. On a country level the biggest winner is most likely Germany. This is the conclusion a recent study made by Cushman & Wakefield comes to:

Our market observation in Berlin confirms this development as we see an increased activity by international investors from large residential property package deals in the housing market to investments in commercial and development properties.

For information on current investment opportunities in all property market segments in Berlin please contact us using the contact facility on our website:



Monday, 16 May 2016

5% Increase in Property Management Fees in Germany

Three out of four property managers in Germany are planning to increase their fees in 2016. This is the outcome of a survey by the Association of German Property Managers (DDIV) The aim is an increase of 5%. Preparing for any upcoming discussion (not only for this purpose) it is important for every property owner or future investor to understand the current market situation and price level for property management services. The development will most likely have impact on calculations.

Last year the Center for Real Estate Studies (CRES) performed a survey of property management service providers and their fee models and fee levels. They were instructed by three main organizations in the German property business: ZIA, IVD and BVI.

The purpose of the study was to determine the tasks included in the basic property management service and which tasks are considered out of scope thus triggering an extra fee either pre-agreed in the contract or offered as needed.
The study provides benchmark values for average fee and service packages for specified market segments with regional differentiation. The main market segments are

1.    Owners Associations (German: Wohnungseigentümergemeinschaften WEG);

2.    Rental Apartment Blocks;

3.    Commercial (business use) properties.

Due to the structure of the membership of the organizations sponsoring the survey the feedback the third group (Commercial) was only 7% of the returns on the questionnaires.
The following fee information is based on Germany wide averages; the regional differentiation is significant and will be provided in follow up articles.

1. Owners Associations

The average fee per apartment is mainly determined by the size of the property:
€ per unit per month excluding VAT
99 units or more
50 to 99
20 to 49
11 to 19
< 10
The increase in cost with reduction in size of the number of owners is plausible as many tasks are the same with any owners association no matter how many owners, e.g. the annual meeting, and thus are shared between a bigger or smaller number of owners.

2. Rental Apartment Blocks

The average fee per apartment is mainly determined by the size of the property:
€ per unit per month excluding VAT
60 units or more
31 to 60
12 to 30
< 11
There seem to be some idiosyncrasies in the comparison of the size brackets but the variances within the clusters are relatively big, e.g. in the 12 to 30 units segment it ranges from 15 € to 30 €. Some of this effect might be explained by the fact that small buildings are more likely managed by smaller property management businesses more eager for business.

3. Commercial (business use) properties

The average fee per unit is mainly determined by the size of the property:
€ per unit per month excluding VAT
60 units or more
31 to 60
11 to 30
< 10
The sample for this segment was relatively small (7% of the returns).
Other interesting aspects are the rent management for condos and pricing for extra services. Detailed analysis for the market segments and regional aspects will be provided in separate articles shortly. Don't miss the follow-up and subscribe to this blog.


Wednesday, 9 March 2016

Why German Property Market Remains Attractive in the Next 15 Years

The housing shortage in Germany will grow if there is no significant increase in building activity. According to a study Prognos AG has delivered for Allianz Building Finance in the 15 most dynamic local markets there will be a shortcoming of close to one million apartments in the next 15 years. The 10 regions with the biggest supply deficits are München, Berlin, Rhein-Main, Stuttgart, Hamburg, Köln, Münster, Upper Rhine region (Freiburg/Offenburg), Hannover and Düsseldorf. The situation could relax by 2045 but only if there is no slacking in the building activities. Despite current immigration and refugee influx the main driver behind the development is internal migration which is currently responsible for 73% of changes in the housing market.

1 Million Apartments Gap in Germany 

The full report in German is available here: Prognos Living in Germany 2045
For support in property search and assessment in the German Property Market please contact us directly: Contact form


Sunday, 21 February 2016

German Housing Market – Price Development in 2015 (Deutsche Bundesbank)

The German Federal Bank (Deutsche Bundesbank) has provided an analysis of the developments in the German Residential Market in their Monthly Report February 2016 The analysis is based on research data published by other institutions like vdp (Verband deutscher Pfandbriefbanken) or bulwiengesa AG.

 Price Development

In 2015 the prices for residential properties saw a significant increase. The spread across the country was wider than in the previous year. The price effect of growing demand combined with continuing favorable financing conditions was again stronger than any increase in availability of housing. Based on price determining economic and demographic factors the value of properties in urban areas will remain high and growing.

Based on information by bulwiengesa AG, prices for residential properties in German cities increased by 6% in 2015 after 5.5% in 2014 and 7.5% in 2013. The prices increase for condos was 6.5%, higher than single and semi-detached houses. Also the price increase for multi-tenant blocks was higher than the annual average since the beginning of the recent upswing in the German property market.

The average price increase for residential properties across all types in big cities slowed down compared to previous years and was the same as in cities in general at 6.25%. The increase for apartment blocks was at 7.25% by 2.0% higher than the average since 2010.

Rent Development

For new rental contracts in cities the increase was at 3.25% close to the previous year’s figure whereas the rent increase for new built apartments slowed down. In big cities the slow down on both categories was discernable. Whether this was due to the rent cap introduced in 2015 in Berlin, Hamburg, Düsseldorf, Frankfurt a.M., Köln, München Stuttgart and several smaller cities and towns.

Economic and Financing Development

The steady economic development in Germany with positive outlook for income and employment supported a strong demand in the residential market. While the price-income-ratio for owned housing increased over the period of the last 3 years the average interest rate decreased in 2015 by 0.5% to fewer than 2%.


Thursday, 11 February 2016

How to Find the Answer to a Burning Question About Your Property Manager: Where is My Money?

 Book Review

A practical tool for a Property Management Audit and Self-Audit, this eBook provides a checklist and user guide to cover the key areas of Property Management Services. This tool supports Property Owners and Asset Managers in their assessment of the performance of their Property Manager and the possible, in most cases quantifiable, impact of the quality of service.
The tool also allows an internal auditor to take the outside in view and thus supports quality control for managers responsible for running property management businesses or internal departments of investment corporations.The checklist can be applied to all property asset types, residential, office, retail and any other rented property. Some details are focused on the German and especially the Berlin property market but this does not disturb the general usability in other regions.
The guide explains in detail the intention of the questions and demonstrates the relevance through some real life case studies. The author highlights the consequences of “just letting things take their course” and shows the impact of a legal structure called “Statute of Limitations” and how it applies to the owner – property manager relationship. The exclusion periods vary in different countries but the general fact is present in most legal systems.
It would be a mistake to view this list purely as a raised finger: Caught You! For a successful operation and positive development of a property a structured communication between the owner and the property manager beyond the monthly reports is very much needed. This tool helps to cover the important areas and forces the owners to clearly formulate their expectations.
The eBook also contains a link to download a complementary electronic version of the Property Management Audit Checklist without commentary.

The eBook is available on Amazon, click the link to get to teh download page.

 You might have to change to the shop of your county.


Thursday, 28 January 2016

Housing Market Report Berlin 2016

The gap between supply and demand in the Berlin Property Market keeps growing. According to the Housing Market Report Berlin 2016 published by Berlin Hyp and CBRE the efforts made by the government introducing new rent caps had little effect on the rent development.
 The report shows that on average the rents offered rose by 5.1% just below 9.00 Euro/m² (2014: +6.6%). The increase in Mitte was ca. 7.0% while Friedrischshain-Kreuzberg and Reinickendorf rose by 5.9%. The lowest increase was in Lichtenberg at 0.9%.

As reasons for the strong increase two main factors are stated:
1.      1.Steady increase of the Berlin population through steady influx based on the apparent attraction Berlin has.
2.      The number of new projects especially in the central districts. The rent caps don’t apply to new apartments coming into the market.
Condo prices rose by 10.1 % on average with the biggest increase in Steglitz-Zehlendorf (+16.3%).

The Housing Market Report Berlin 2016 is available for download on our website


Saturday, 23 January 2016

Property Management Case Studies

Anyone can decide to start a Property Management in Germany. No qualifications or permits are required. It is vital for the well being of a property investment that the owner checks all the aspects of the management frequently or as a long distance investor have someone do this on the owner's behalf.

We are always astonished about the things that can happen in a Property Management and for how long it can go unnoticed. For illustration purposes we have compiled a small selection of actual Property Management Case Studies, just the names were changed. Here are the topics currently available:
  1. Regular Rent Increase Forgotten!
  2. Trouble with the Re-Renting Process.
  3. Property Manager with Criminal Energy.
  4. No Documentation of the Building and Investments Made.
To read the details, just follow this link Property Management Case Studies. It will take you to the relevant section of our website.