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Germany strong on buy-to-let

17th November 2008 | back to article listings BACK    print this article PRINT

Read about Germany in the news and the most likely thing one will encounter at present is stories of how the country is now in recession. Yet despite this, it could still be a very useful place to invest in property.

Of course, the official finding that Germany is now in a negative growth phase may only differentiate it from Britain in the sense that our own economy awaits the next set of quarterly statistics. With several major economies – including the eurozone as a whole - also in recession, many would argue that this spells bad tidings for the property market in every case.

This, however, is where Germany may be different. While homeownership is a mass activity in Britain or Spain, in many continental countries people tend to rent a lot more and this is particularly true of Germany. As figures from NSP have shown, while 70 per cent of Britons are homeowners, only 42 per cent of Germans are.

Recession or not, therefore, Germany has a very large rental market. Commenting on the opportunities this affords to investors, Paul Collins, property editor at Buy Association, said: "The market in the cities is particularly good; particularly if you are looking to buy-to-let because there is a very high proportion of people who rent in Germany as opposed to buy domestically."

Berlin, he suggested, is a particularly good market in this respect, since there are parts of the capital in which up to 85 per cent of people rent.

He added: "It's a great opportunity to buy, not only to buy property to let-out, but you can even buy property that has sitting tenants in it so you are almost instantly getting an income coming in there.

Mr Collins added that there are also some new build properties being constructed in smaller towns around the country that may offer possibilities as well, although he cautioned that a good exit strategy (i.e. to sell on such properties) must be in place.

But the bottom line must be that for investors in buy-to-let, a good return is a highly attractive incentive to invest. Add to this the stability of a market that is likely to be constantly demand-heavy for rental property due to the lower owner-occupancy figures and the ingredients may all be there for a good investment. In a recent poll by the Association of Foreign Investors in Real Estate, Germany came second only to the US, an improvement on previous polls. In the current world situation, it may be one of the best places a buy-to-let investor can look.

This is a press release by Assetz also available at http://press.assetz.co.uk/articles/4489.html. Alternatively, please see our full press release archive.

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