Let’s face it; there must be a good reason why so many businessmen and multinational companies are investing money in the Berlin property market. Not only are Berlin property prices set to increase dramatically in the nearby future, but the city in general has become an increasingly popular European destination. This of course has in turned resulted in an increased demand for accommodation.
With Berlin property prices being as low as they are, many real estate investors are snatching up opportunities at an alarming pace, but of course, with so much potential to earn phenomenal profits, such opportunities are disappearing fast. Even though the cost of property has been rising steadily, by comparison, Berlin property prices are still amongst the lowest in Europe.
Many people are intrigued as to why Berlin property prices are so low, but if you take a look at the city’s history you soon begin to understand why. When the Berlin wall was torn down, and East and West Berlin reunited with each other, there was widespread optimism, with many people believing that it would result in Germany having Europe’s most powerful economy. At the time, the general consensus was that the city of Berlin was in dire need of huge scale investment in order to develop all the various sectors.
This huge drive to develop the city inevitably resulted in a massive construction boom. With that said, many Berliners were leaving the city in search of new horizons, which in turn meant that there was less spending taking place. This together with increasing levels unemployment eventually led to Berlin property prices falling dramatically. With so many residents having left the city and with so many people unemployed, the Berlin property market reached a point where supply outstripped demand. In fact, Berlin property prices had declined by more than 30% by the end of 2004. When property prices fall so dramatically many investors tend to get a little jittery, thus resulting in many of them selling off their investments, and of course this harmed the market even more.
Interestingly enough, many other major European cities saw property prices climb while in Berlin they continued to fall. The result being that Berlin property prices are today perhaps the most affordable property prices in all of Europe. There’s also a very strange phenomena in Berlin, in that most locals prefer to rent property as opposed to buying. The strange thing is, the same can’t be said about the locals of other German cities. However, this does mean that there are plenty of opportunities for investors to rent their properties out.
With that said, it’s not only the natives who rent property. In fact, tourism in the city has exploded in recent years, and today one can see new hotels and apartment blocks going up everywhere. What is evident to investors is that Berlin property prices are climbing, and they’re climbing fast. One can only wander how long it will be before the Berlin property market is beyond the average person’s reach.