Buy income property in Germany, Austria

In 2018, new rental rates in the seven largest cities in Germany continued to rise. However, compared to the previous year, the growth weakened, as shown by analysts from the real estate specialist Empirica, who published their report in Berlin on Thursday. Accordingly, new rental rates in Berlin, Hamburg, Munich, Frankfurt, Düsseldorf, Cologne, and Stuttgart increased by an average of 4.2 percent.

The growth rate in 2017 was 5.9 percent, according to information previously published in the “Frankfurter Allgemeine Zeitung.” Rental rates in existing contracts were not recorded.

The reason for the lower increase in rent is the increasing new housing construction in Germany, although it still lags behind the goals set by the federal government. But demand has also reacted, says Empirica board member Reiner Braun: “Young families and low-income people are increasingly fleeing to the suburbs.”

Students, on the other hand, prefer “secondary cities” such as Magdeburg, Chemnitz, Kassel, and Heilbronn.

However, there are significant differences in the increase in rental prices: while new rental rates in Hamburg rose only slightly by 1.3 percent over one year, in Berlin they increased by 6.4 percent.

According to purchase prices, the growth does not decline—instead, it increases: in the largest cities in Germany, the prices for “condominiums” have sharply risen by 11.4 percent over the entire construction period. In 2017, it was still 9.5 percent. Braun attributed this to the high interest from investors: “Domestic and foreign investors continue to see opportunities for returns due to low interest rates.”

According to “Handelsblatt.”

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