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Surviving and thriving

7th August 2008 | back to article listings BACK    print this article PRINT

Surviving is something that quite a lot of Germany has had to do. While the post-war story of West Germany was of Europe's strongest economy, the east laboured under Communism and Berlin faced division.

Since reunification, it has been the whole country that has felt the pinch, from the costly burden of absorbing the old German Democratic Republic to the recession that hit the country in the early 1990s, followed by a long period of slow growth, budget deficits and high unemployment.

These factors, plus the unusually low level of owner occupancy, have meant Germany has not had the boom in property prices that many of its fellow European countries have seen.

Yet this is to the country's advantage, according to Chintan Mahida, property correspondent for overseas property portal nubricks.com. She stated: "Germany is being affected by the global credit crunch. However this impact is being felt in its manufacturing, export and economic sectors rather than its housing market and is not expected to experience the serious side effects from an economic downturn due to low interconnectivity."

The reason for this lack of connection, she noted, is all down to the different way in which consumers approach money. She stated that the country is "one of the most credit-wary nations in Europe", with this wariness stretching into home loans as 58 per cent still rent their property.

What this offers the investor, Ms Mahida explained, is security and safety. This is no fresh, new market of the kind that may offer potential boom but also the chance of sudden bust. Stability, perhaps befitting a country renowned for organisation and discipline, is the dominant feature here: "A lower demand for property buying and a solid rental base is what makes the German property market a safer bet over a speculative, emerging market. Although in the long term the gains maybe lower, you are likely to experience slow, steady growth."

So is slow and steady growth good cause for optimism? The answer, it seems, is yes. A survey by investment fund manager union investment found that Germany was ahead of Britain and France when it came to the sentiment of investors. In all, 46 per cent of German investors, along with 52 per cent of their British counterparts and 50 per cent of French investors said the level of property investment in Germany is likely to see the level of capital investment in the industry rise.

Therefore, it seems, Germany, which in many so ways has struggled economically while other countries have raced ahead in recent years, could be one of the best long-term prospects around.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/4319.html. Alternatively, please see our full press release archive.

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