Future of the real estate market in Berlin

most germans don't finish school until they are well into their 30s. which would mean that a person would be starting their first real job just short of 40. interpret this as you will.

good observation.

along with nebenskosten (heating, electricity), there's also the monthly fee.

it may take 20 years for the employment situation to improve. it is a little better now than it was say, 5 years ago. but there are a disproportionate amount of people in berlin working 400 euro/month jobs.

Another difference between the old generation and young generation

Ah, THAT are the people you know

THEY rather.. if you're going to shout, at least get it right..

nah - doin it just for munich people like you

This is a facinating thread.

The main take-away I have is, if 90% of Berliners rent, who owns all the housing stock? Are they a) altruistic individuals who feel they can't can't lobby to get their deadbeat tennants to pay a market rent and don't care because they can write off the losses and/or own the stuff as post-WWII restitution with effectively a zero cost basis, quasi-governmental agencies who don't care because the whole of the German tax system cross-subsdizes it, or c) shrewd investors who are just biding their time until the hammer comes down? Who owns all this shit?

I lived in NYC for 15 years, and saw the effects of rent control, the closest thing to socialism that the U.S. has: Owners would just let stuff deteriorate until deadbeat tennants died or moved out, and then spruced stuff up and rented it to the higest bidder. I'm not completeley educated on the topic, but I think that happened in the better neighborhoods of London as well. "Poor but sexy' completley describes the Lower East Side, Brooklyn and Spanish Harlem in MYC and the East End of London ... and they're now all in the process of being completely gentrified.

The prior comment about the Poles hit me like a lightning bolt ... they're hard-working and crafty enough to push out the layabout locals. No one is going to care about the current German '68er cryto-communist, Die Linke-voting, bike-to-the-Arbeitsamt grey ponytail squatters in 20 years anymore than people in New York cared about the penny-pinching Irish/italian/Jewish immigrants or London cared about downwind working East Ender cockneys or Jews who were all eventually displaced by hipster doofuses.

If and only if the economy can generate some real jobs ... i.e. managerial/entreprenureal-grade stuff, which attracts gentrifiers. If the locals keep counting out euro pennies at the Aldi on their make-work McJobs, then only outsiders can marginalize these people and force them to move to god-forsaken depopulating East German towns the same way that San Francisco and other prosperous U.S. cities have pushed wage slaves to the outer burbs.

Thoughts?

Blame you? No need for that. One of these days you'll find out that you (or anyone else, for that matter) can't have it all.

Don't be so bloody condescending. I'm not an idiot.

Condescending? Not in the least, and not intended that way, either.

all with master's degrees and PhDs don't know how that happened . might be a problem for the young ones when they try to move up in a company though.

but the question venus is as follows:

does generation me want everything without having to work and save as other generations (such as X) have had to? there might be a reason why all these 20 somethings are going psycho and going on a shooting spree in the u.s. --they want it all and want it SOFORT. and when it doesn't happen IMMEDIATELY, they freak out.

the older genration here (those over 30) still believe in saving and not going into debt. if you look at the demographic information about germany, you'll find out that the generation you're pointing to is probably less than 16% of the german population. you'll also find that the people who make more than 40K or 50K per year are well over 35. especially in berlin.

even when someone vacates an apartment, the rent can only rise a certain percentage point. so no, what happened in london and new york can't happen (at the moment) in berlin. will this change? probably not. the renter is king.

a vibrant real estate market will not lift berlin out of its malaise. it will only turn it into washington dc with big areas of haves and have nots. but unlike washington dc, the local community will protest (hence, the car burning spree). http://www.welt.de/berlin/article1445146/K...usbesetzer.html which i do not condone. i am merely pointing this out.

big industry (and i don't mean the fashion and media industries) needs to open business here. i mean companies that will open shop and hire a few thousand people at a pop. not 50 and 100. and at the moment, these companies are bypassing berlin (because the government apparently is not a business friendly government).

I never said that my generation wanted everything without having to work and my statement was grossly misinterpreted. I made a statement about my generation saying that we wanted everything we could get our hands on, not that we expected to have everything immediately or weren't willing to work for it. In fact I meant the opposite. We want a lot out of life so we will strive to work to get it. I think a lot of younger people are willing to work longer and take less holidays to compete. I even dated a guy who worked 14 hours per day 6 days per week (and yes he was German.) He is 27 and also earns a great salary and intends to buy an apartment soon.
Just because my generation is not currently influential or earn a lot of money does not mean that we will never be. We may not CURRENTLY be earning 40-50 k but that doesn't mean we will never hit 35 and have high earning careers. This thread is about the FUTURE of the berlin real estate market, not about how the berlin real estate market is right now and I made a comment about how my generation could influence things later as we have different values than the one that is currently the 'norm.' Also while 20-something may make up a smaller portion of the German population, Berlin is a very 'young' city and a lot of people who come here to study do end up staying here, especially as the economy is improving and there are more jobs opening up. It appeals to younger people, even those out of university, as it is vibrant and there is lots to keep busy with. I know that's why I'm here, for one.

For the record I am 23 and own my own apartment so I think I'm not doing too badly.

I found it not only condescending but also you completely misinterpreted what I was trying to say.

It only takes 5 years to complete a masters here. One can finish his/her masters by 25 easily if they don't take their own sweet time doing so, fail anything or change majors several times. A lot of people manage to finish school before 30 if they really actually want to.
I think the work ethic of the younger generation also makes them have a lot going for them.

i'm sure a number of people under 30 aren't fortunate enough to be trust fund kids and don't have the luxury of having their parents shower them with loads of euros in order to purchase an apartment in prenzlauer berg.

the influential generation in germany are the 68ers --we will all pay dearly for their excesses as they start to retire. we already are. as the generation behind you will pay for the excesses of the 'me generation.' as my generation is quite small and rather uninfluential , i have nothing more to say on this particular subtopic.

Who said I was a trust fund kid? You don't know me.

There are no "trust fund kids" in Germany: a) the people are too poor and Germany doesn't recognize trusts anyway.

If "rich" people in germany had to pay full-freight university fees, they'd all be driving Fiat Puntos.

It still doesn't answer the question: Who owns all this shit?

If you own one of these apartments and you can't recapture your investment, then why aren't people throwing road flares under the front door, collecting the insurance money, and moving on?

The seeming lack of economic motivation/ire amongst the providers of housing to do so means either they a) don't care, can't do basic math or c) pick up the economic benefit some other way (tax write-offs, etc.). Water seeks its own level ... people can't really be this charitable to subsidize this unles a, b, or c apply somehow.

If grocery stores were subject to ceiling prices, they'd stop putting stuff on the shelves, no? Who keeps putting all this stuff up housing-wise if it's such a losing proposition?

He meant me, because I'm young, single and bought an apartment *rolls eyes*

You raise interesting questions my friend. I would definitely say the number of habitable properties in Berlin is possibly a good deal lower than the total number of empty ones. I was looking at a particular apartment and I was interested in it but I got there too late and I found it had been tenanted. The owner had kept it vacant in the hope of selling, to no avail and was 'forced' to rent it out. The strange thing was he apparently had it rented out quite quickly after giving up on selling it. This may be isolated of course but if not then it looks like people just prefer to rent at the moment. Berlin can return good yields to investors. Not startlingly good, but solid 5 and 6% type yields on residential. Commercial a bit more but with a higher risk of vacancy as you're depending on your tenant's business to survive. a lot of people are happy to make this sort of yield with a small chance of capital appreciation thrown into the bargain.

I think that people who owned property after the wars felt better for having bricks and mortar in their name than 20 trillion worthless reichsmarks, so it may have been ingrained in these people to have what you hold, even if the grass is greener in other paper investments. I get the feeling a lot of this property has been passed down generations.

Thanks for thi insight.

But to me, that'd seem to mean that Germans in general would be predisposed/clamoring to buy real estate as a "safe as houses" investment. But they're not.

Therefore, I'm suspicious a lot of this stuff is still publicly/corporate owned. Big private equity firms have swept in to buy a bunch of it with hopes of selling it back out to tenants ... but this seems to be working out as well as building pork sausage factories in the middle east.

germans have the highest savings rate in the world. the culture is a debt adverse culture. germany is a world class exporter because the locals aren't world class consumers. --companies have to make money some way. all this is well documented in the business pages of most international newspapers as well as numerous econ books.

Sorry Hallo.
WRONG WRONG WRONG WRONG
It is because they make the most reliable things..call it their enginering, dedication to a profession or what. In nearly all products one uses in the world there is something in it made in Germany - it is Germany that has this calibre - the country with the highest number of things in most products. Your shoe, iron, your stereo, in your car, in your refriugerator, the lining in your sweater, tv camera, backpack, credit card, you name it. nearly everything. The reliability comes handy in any product. That is where its export business lies. No other country beats it on this. Sorry I devulged secret information. Only known by a few. It is not like oh have this bid refrigerator it comes from Germany but have this refrigerator and hey u will neevr know most parts in it came from Germany.

"aren't world class consumers" many countries have this.
Also Germans tend to like buying quality stuff not stuff we buy in the US and throw away.

lecture number 259917234

If this "lecture" is a representative sample, please do not bother to divulge any others.

If you cannot get the point you will never get to understand many things in life. Sorry for the spellings/quick typing is what I will say.

I don't think you're too far from the truth with this but Irish people were very debt averse 20 years ago too. As Germany's economy suffered recently quite a few german's have ventured outside their country to work in anglo-saxon (and similar) countries and I've worked with a fair few here in Ireland recently. They are as capable of running up credit card debt as anyone. Cultures change. This is part of the property investment gamble. Will german people forever more be savers who do not wish to own their own homes (remembering however that 42% of germans DO own their own homes) or will they become more interested in this? Will the banking system encourage further moves in this direction? Will the government change the tax code to offer more incentives towards home ownership?

Germany recently passed laws to bring REITs into being in the near future. If you aren't familiar with what a REIT is it might be worth a google. Suffice to say they generally encourage property investment.

These are commercial REITs which were approved- they cannot invest in residential property.

Please FYI do not buy into this. PLEASE AND PLEASE!!! I may not be the best writer in the world but I pledge to all auslanders living in Germany to understand this, the ecomony and the world before you die.

At least do not pass the fake to your kids ...I can say for your kids.

Good luck and tell me anything that strays away from the lies.

JUST THE TRUTH. AND GOOD LUCK!!!

Liebe: Read this and then go the fuck away. A thread about real estate markets is no place for a quasi-illiterate 16-year-old German emo girl's opinions about "knowing nothing about life". I think I know the mistake you made: you typed "toytowngermany" into your browser when you meant to type "livejournal". It's a common mistake; the letters are so close together.

A warning about REITs: REITs are there to make money for the bank using the investors' capital. My ex- was involved in getting approval for them here in Germany. My experience with REITs includes many late nights spinning charts and information so that when my wife went to the investor meeting the next day to tell the attendees just how much they'd lost that quarter they wouldn't string her up right there and then. In hindsight that may have been a mistake, but it turned out I was very good at this. She actually had people thanking her for losing 20% of their money inside 3 months.

Avoid REITs.

woof.

good observation. but i'm not talking about emigrants. people who migrate from any country tend to not fit into the mainstream.

during the economic miracle, the country had the highest savings rate in the world. i don't think an ireland-germany comparison is a good comparison. i think a japan-germany comparison is better. japan used to fight it out with germany for the top spot in the thrifty category. its one reason japan went through a 10 year recession. domestic spending completely dried up.

but yes, 42 percent do own their homes. there was a good article (some where) about an american who married a german in the u.s. they bought a house somewhere on the eastcoast and then later sold it for a nice profit and moved to germany. when they moved to germany, the american wife said 'let's buy a house' and her husband replied 'hold on there.' he wanted to wait until they could pay for the whole thing in cash.

For any others wondering what REIT is, here's an explanation.

thanks to all of you for bringing up some interesting insights for the future of Berlin and its real estate market. I've been watching the market closely over the past year for a few reasons, but mostly because i'd like to live there for a while as its got as much (or if not more) to offer than most other great cities. I have made three trips over to Berlin during the last 5 months, attempting to make particular property purchase, and each time i've been outdone, even having offered more than the asking price. Now this says many obvious things about the current real estate market, but what i think is most relevant to the discussion is that the culture of Berliners has already changed! Two of the properties i tried to buy were bought by native Germans who (this is what the agent told me!) were 25-35 and were buying to live in themselves, the third, was a French/German, who was returning to retire in the city. Someone mentioned how the Irish were different 20 years ago when it came to borrowing money to buy real estate and look at them now. The whole culture changed there, some for the better, some for the worse, and thats exactly what has happened and will continue to happen in Berlin. For those wanting to buy a nice home, and make a good investment at the same time, Berlin's current market is very market!

A real role model on this forum?
You like using the word fuck on the forum.

Liebe is fucking your ex?

You say the forum is for real estate then you write stuff like this.

You should have started with “A warning about REITs:�

@RedRayX
This was your first-ever post on the forum, right? Just wondering.

Welcome to Toytown.

ireland went through a huge economic boom in the 90s. germany's boom ended in the early 80s. ireland is still doing quite well. germans feel a bit poor at the moment. i'm sorry to say, but one can't base a whole theory on one's personal experience. should look at numbers. read the financial times. huge story last weekned on east germany in the property section. overall positve--read, 'cheap houses.' but says 'don't count on selling your property to germans.' or something to that effect. i only have a hardcopy of this, otherwise i'd post a link.

Just to clarify. I am not, nor was I advocating REITs, merely highlighting that they have generally encouraged investment in other countries which have adopted them as an investment vehicle. Greater investment generally means higher prices. There is nothing stopping anyone investing in commercial property if they desire. It has advantages and disadvantages.

Here is a press release which may contain interesting basic information on REITs:
http://www.rolandberger.com/press/en/html/...y_on_REITs.html

What constitutes a good investment will depend on many factors, so blanket statements about an asset class as intrinsically broad as REITs are of little relevance.

LAST STAND FOR THE FAR-LEFT

Berlin Commune Fights the Property Developers

By Stefan Berg and Marcel Rosenbach

The Köpi in Berlin is famous as one of the last remaining remnants of the city's squat culture from the early 1990s. The building, which is in a desirable location, has now been sold to a property developer -- but the residents aren't giving up without a fight ...

Hello from Canada !,

This is a very interesting topic, here are my 2 cents worth ; I think that key here, is to buy if you see this as a possible home for the long term, most of the best investments that I have made, were not based on speculation, but rather a need to put a roof over my head. In 1991 I purchased a couple lots and apartments in Warsaw, I paid less for these then a new VW GTI I was eyeing, glad I did, since they are worth a mint now, in 1991, this was something that I was forced into, now I feel it was the best possible choice to make. In 1999, I moved to Vancouver from Calgary, at the time we had a shitty goverment in power, I purchased a 3 storey townhome, during the leaky condo crisis in Vancouver, the developer paid me cash, just to take off his hands, at the time everyone said that I was crazy, needless to say, the sale of the home allowed us to build a new, home in a exclusive area, this home 2 years later we resold for a tidy profit and moved oversea's for 2 years, during this time we purchased a town home in Warsaw and another old farm near Lobau, near the border, now I purchased these again, not as a investment, my wife's family in Berlin believed that I was crazy to buy in Lobau, to me it seemed crazy to purchase a home, land and character for the price of a worn out VW Passat. 3 Years later I sit in Kelowna, Worlds 13th most un-affordable place to live, a crazy little town with a big lake and some great wineries, dreaming of cashing in and moving to Germany, to live mortgage free in a vibrant city, in the center of Europe, with everything to offer. Berlin is a unreal value, compared to any other city, were one would want to live in, yes, prices are low, Germans do want buy homes, etc, etc, but for a place to live, based on value, its un-matched, I would always feel more secure to invest at the bottom, in a developed country, market, rather then speculate. Everytime we purchased anything, we did so based on the fact that we needed a place to live, we always bought at a time were everyone said " why?, you are crazy !", and everytime we were lucky enough to come out on top, by pure luck.

I believe that Berlin is very under-valued, the sheer reason this topic exisits and evokes such passion, means that more and more people see this as a great market, we should also look at Berlin as being the at the center of Europe, not Eastern Germany.

I'm from British Columbia, and the economy there is one of my biggest arguments of how economies can change and real estate markets can boom.
And I agree. The iron curtain is down and Berlin is smack in the center of Europe.

I never saw this before...I think that it's pretty BS. Someone owned that building and it was their right to sell it, and if you are squatting you give up your right to complain for such things, as you have no tenant rights and nor should you.

I hate anarchy. It doesn't even make any sense.

Well, Köpi is one of the very oldest squat in Berlin, and the as far as I know the only true squat left.

The building used to be a hotel, but was bombed during WW2 and about 1/3 of it got destroyed. The building was more or less abandoned for 40 years or so! In the late 80'ies some kids decided to move in.
Now, almost 20 years later, when the area has been gentrified the land have been sold and the new owner is going to raze it to build another unnecessary shopping mall, or whatever.

Squatting makes perfectly sense in a capitalist world. Property is theft.

Property is theft?

I can't agree, as a homeowner.

I don't care if it's the oldest squat in Berlin. If you want to squat, you just have to accept that you might be forced out one day and you likely can't stay there forever. You don't pay to live there and the world bloody well doesn't owe you anything.

It likely wont be a shoping mall. There isn't enough space there and it's not the right neighbourhood. It will likely be developed into apartments and resold at a profit. Not all property bought is used to make 'shopping malls'. Most of it is zoned and develped for residential sale.

Likewise, if you buy a squatted property behind the squatters back just to evict them you just have to accept the consequences...

(Besides, Köpi did pay rent for some years.)

No one bought it 'just to evict them.' They bought it to develop it and make a profit. That's how this world works.

Venus, i'm not sure if you're aware that you live in a city with a communist government and that the 2nd largest party in the east part of germany is Die Linke. berlin is all about anti-capitalism.

Debt threat to German real estate Euromoney magazine

I guess nobody is aware of this
this are real news also to me. Please explain.