Good real estate in Germany sells within a few days, as the income of it exceeds interest on deposits. Sergey Ermakov, CEO of Moscow office of a German company Stimul Consulting, tells portal ee24.com about trends in the market in "the country of tenants".
– As you know, the Germans can boast of their mobility, and therefore they like to rent – it is easier and faster. Will this pattern change in future?
– Germany is unique due to the fact that its residents prefer rented housing to their own, which is beneficial both from tax point of view and from the legal point of view (tenant is protected). Nowadays residents of Germany withdraw money actively from their deposits that bring 0.75% per annum, and invest funds in real estate, which gives them steady 3% – 10% per annum. Now we are not talking about buying for living, but for using it as a commercial property. Today investing in housing in Germany is more popular than, for instance, life insurance.
– And how profitable is this business and what profitability do you expect in future?
– Real estate in Germany is still underestimated. Trend of price increase is only beginning, and the one who enters the market today, will get double profit. Firstly, real estate itself will be more expensive, because it will rise to the level of prices in other European economically developed countries (France, England, Switzerland, etc.); secondly, you will be able to receive income from renting out the housing.
Hannover
– What is better to buy for investment purposes, what kind of housing?
– Now prices rise in all segments of the real estate market, that is why rental cost rises too. Demand for small apartments increases. They are in demand primarily from the Germans themselves, who prefer to live alone most of all, as well as from students, including the ones from other countries.
– From time to time there is news that Germany is likely to get imbalance of supply and demand: there are a few properties, and many potential buyers, including migrants.
– You can’t say about the German real estate market as a whole that in one sector there is some deficit, and in another, on the contrary, there are many offers. Generally, the words "deficit" and "Germany" are incompatible. Another point is that marketable properties are sold within some weeks, if not days.
Hamburg
– Please, tell us about demand for real estate from abroad. In particular, how often do the Russians buy? Does their consumer behavior differ from the Europeans?
– Despite of high interest in real estate in Germany, which is expressed by a great number of requests, including our company, the number of completed transactions with Russian citizens is low. The Russians are not always ready to accept German conditions of buying real estate, suggesting that process of purchase will be similar to Russia or another resort country, for example, Bulgaria. And the fact that today it is not the buyer who chooses real estate in Germany but real estate chooses him, to put it mildly, surprises buyers from Russia.
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"Today it is not the buyer who chooses real estate in Germany but real estate chooses him"
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It is worth noting that resort property is popular among the Russians, but citizens of other European countries operate carefully and prefer to invest only in highly marketable properties. Though profitability is not always high, possibility of renting out the property is guaranteed.
Reliability, stability and regular income have been and still are the main advantages of buying property in Germany. Property prices in Germany are legally protected from a "bubble" that makes the market predictable and understandable.
Interview: Kirill Ozerov, ee24.com