The real estate market in Germany: overview of new trends
As a result of the pandemic and crisis, a number of processes in the world economy had to be reconsidered. For some time investors preferred not to make large deals, and when the situation became stable, they started looking at new projects. As before the crisis, they were interested in the real estate market in Germany, which is considered one of the strongest.
Sites in this European country are very popular among Russian citizens, which is due to several factors. Firstly, the German economy is considered the most stable in Europe, which makes it possible to predict the level of return and return on investment for decades to come. The second factor is the size of financing rates, which are rather low in the state, which attracts investors from many countries to the local market. In addition, German real estate is characterized by high quality construction, which guarantees a long service life without major investments.
However, not all buildings in Germany are equally profitable, each has its own characteristics and a degree of risk to the investor. And the opportunity to earn big money in the short term depends on the risk indicator – the higher it is, the faster you can repay the investment.
The pandemic has changed some processes in the market. Objects, real estate, which used to be in good demand among investors, are no longer in such demand, and other options have come to the fore. Despite all the difficulties, investors did not leave the segment, the percentage of those who suspended their projects in Germany during the pandemic was small and had no significant impact on the processes.
The market leaders are now logistics and retail properties as well as housing and food chains. In these sectors there is an increase in demand, and with it in value.
If we talk about residential real estate, the country has about 50% of the population renting apartments and houses. This means that this investment option is a reliable way to earn income on a regular basis. However, the trends in this segment are changing. In a few years, the format of housing for cohabitation will not be in demand, as well as furnished apartments and co-working.
Since the pandemic, a number of stores have moved to the contactless option, and online shopping volumes have increased dramatically. Correspondingly, these formats require warehouses, and the demand for logistics property remains extremely high even after quarantine. Against this background, the demand for land plots for construction of logistics facilities has increased.
The situation with hotels and apartments for short-term rent is not easy. Literally a few months ago there was a revival, before such objects had serious losses.
