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Mortgage Loans in Germany
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In the major metropolitan areas the prices have had a tendency to drop in areas of the city or region which are less
attractive for infrastructure and cultural supply. This is due directly with the general economical situation worldwide. The economy in Germany is suffering from the downturns which have occured over the past year.
Many of the banks and companies that have been the economic indicators have reduced their number of staff and contracted workers by 15% or more. As the world market slumped, so did many of the German businesses. And
with a higher percentage of people unemployed (currently over four million again, the highest figure in four years) the money spent in general is declining.
An investor has to concentrate on cities and areas which are still desired for renting. Rents that were paid two or three years ago
in many cases will not be obtained again. In the past, many companies rented dozens of apartments to have them available for part-time employees or high-end apartments available for their directors and senior
management level. In most cases, the staff will have to pay their rent themselves, and that will almost always be at a lower cost.
Looking at specific cities, the most attractive and those with the highest rental level are Frankfurt, Munich, Stuttgart, Dusseldorf,
Hamburg, Koeln (Cologne). These are the key metropolitan areas which will also support an investment property interest in the economical development. Politically Berlin may be the center of Germany, but economically
and as relates to Real Estate, Berlin may not be considered as a very attractive market – there are to many properties on the market, and the prices have gone down more than in almost any other city in Germany. This
is also attributable to the fact that in the whole of Eastern Germany, in the 90s, Real Estate investments were heavily supported by tax advantages, to the point where we now have thousands of flats in Eastern
Germany empty.
Refurbishing old buildings and either keeping them as income property or selling them individually as condos might be very worthwile
now, due to the fact that new home construction is outpaced by demand..
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