The traditional rental in the European capital cities such as Paris and Berlin are really suffering due to the competition from the rental online platforms. Whether it be the owners, real estate agencies or hotels, problems caused by online rental platforms are several : noise pollution, lack of property or hotels desertification…This is the point of view dealt by Gwenaëlle Bellec in the report “Les excès d’Airbnb pointés du doigt” broadcasted in news the 23th February 2017 on the first French channel, TF1.

 

Arnaud Schott, associate of ADEN Immo talks about the shortage of property to be rented in this report due to the significant increasing of inhabitant’s number in Berlin and the Airbnb competition.

 

Thus, the reporter presents the determination of the city council of Berlin to struggle against the seasonal rental. In this way, the city hall has forbidden to Berliners to fully rent their main properties for short-term in order to limit the deficiency of properties and the increasing prices of rent. Moreover, the main dissuasive action is potentially influential: owners in irregular situation can be punished by a fine which could reach 100 000€. This measure, which took place in May 2016, has given as a result an important fall of seasonal rental (around 8000 properties) mainly by the professionals of the sectors. However, this is almost nothing compared to the demographic evolution of the German capital: Berlin’s population is really increasing and about 20 000 properties per year until 2030 will lack.

 

You can find the TV report starting at the 26th minute : http://www.tf1.fr/tf1/jt-20h/videos/20- heures-23- fevrier-2017.html

You can find the results of the law in Berlin on http://karat.studio/blog/airbnbmisused

A journalist interviewed a member of the ADEN Immo GmbH as part of his article “Berlin takes advantage of the Brexit but does not want to become London”. This article was published in “La Tribune” on November 4, 2016 and demonstrates once again the attractiveness of real estate investments in Berlin.

European Union and British Union Jack flag flying in front of Big Ben and the Houses of Parliament at Westminster Palace, London, in preparation for the Brexit EU referendum

The German real estate market noted a decrease since the Brexit, in favour of rising cities like Berlin. Since 1989 Berlin has made efforts to catch up its economic growth and it has an impact on the real estate market prices. Even if they are still affordable they are constantly rising. The government has therefore taken correctives actions such as the non-renovation of buildings in some areas, rents control and Airbnb regulation in the city. These actions are supposed to help Berlin not to be a second London, where the citizens are all leaving the city to live in the suburbs because of the prices. Their affordability attracts the foreigners because “the German just started thinking about buying”. The investors are really interested since 84% of the citizens in Berlin are tenants.

Link to the article: (in French) http://www.latribune.fr/economie/union-europeenne/immobilier-berlin-beneficie-du-brexit-mais-ne-veut-pas-devenir-londres-613477.html

 

Indeed, with the sales to French customers in 2015, ADEN Immo GmbH offers a proven expertise on real estate in the German capital. "Our typical customer: 42 years old, male, looking for a two-room-appartement, approx. €180,000, in the center of the city, for self-management or to rent." 

 

Some important points to remember:

  • a very favorable taxation through a bilateral tax treaty
  • an interesting German taxation, with a possible depreciation and 
  • no taxation on the capital gain on a sale after 10 years 
  • a growing market and worthwhile prospects capital gain
  • strong demand for rentals due to excessively low rate of vacancy 

In its issue from February 19, 2016, the French weekly “Le Figaro Magazine” gives an overview of rental investment in France. There are clouds on the horizon: in Paris, the rental income has decreased due to the application of the “Loi Alur”, a rent regulation law voted in March 2014. The investors are now turning to other markets like French regions or foreign countries to improve their rental income.

Berlin is one of these new directions to explore. The journalist Colette Sabarly asked David Nguyen, co-founder of ADEN Immo, about the benefits of having a rental property in Germany for French investors:

“In Berlin, the rental income fluctuates between 3,6% and 3,8%, which is far from exceptional. However, the investment cost is amortized up to 2,5% during forty years and there is no capital gains tax if you sell your property more than 10 years after buying it in Germany. Also, [as a French investor,] you won’t have to pay social security contributions on your rental income.”

According to the journalist, more and more French investors are seduced by the idea of buying a rental property in Berlin. One can add that Berlin only has a vacancy rate of only 2% and that the demand is increasing due to the demographic growth. Also, the real estate market is growing: you will be sure to make profit when you sell your property.

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Real estate experts in Berlin and Paris

ADEN IMMOBILIEN is an international team of experts focused on real estate in the German and French capitals.

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