Wednesday, 15 February 2017
Investors have to expect a further rise in rent levels, as otherwise an acceptable yield could not be expected despite the low interest rates.
The immigration from inside Germany to Berlin, Hamburg and Munich has weakened considerably and is no longer enough to compensate for the increasing suburbanization. This is not the end of the swarm behavior, but the swarm continues to move into relatively more favorable cities such as Leipzig, Rostock, Erlangen or Regensburg.
The cause for Berlin, Hamburg and Munich nevertheless experiencing almost constant immigration, is due to a "lucky" succession of different immigration waves from abroad. These, however, have reached their climax. If there is no further immigration wave from abroad, the three cities are expected to experience a sharp slump in the growth of housing demand.
At the same time, as the "housing construction machine", especially in Berlin, is increasingly taking off and larger and larger projects are being planned, under construction or near completion, the housing supply will be expanded strongly in the near future. As a result, the rise in the new contract rents will soon come to a halt.
A free summary version of the study is available at this link:
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