Find our favorites in preview and our real estate advices on our networks
Find our favorites in preview and our real estate advices on our networks
And also in this area the French are not particularly happy: Thanks to Berlins uprising real estate prices Germany wins the duel between the two real estate markets… In this context ADEN Immo is quoted as an expert in the Berlin property market: "Even when buying, Berlins housing prices are just one third of the prices in Paris". "The average price in berlin is € 2,800 / m², says David Nguyen, associate of ADEN Immo, an agency company specializing in Berlin real estate."
Yes, Berlin is worth it!
The m² is a gift there
The intended Act Duflot rent restriction, which will be introduced in the Ile-de-France region, in fall, is largely inspired by the German „Mietspiegel" system. In every city and district a comparative rent, which sets a tariff for each new lease exists. This system allows a more moderate rise in rents to control the market… the prices are only half as the value as in France. But it also has an advantage in terms of competitiveness, since the companies are not required to follow the inflation of wage level to the real estate prices, to enable their employees to pay a flat. A property for sale in Berlin is "three times cheaper than in Paris" because the average price is 2800 €/m², says David Nguyen, associate of Aden Immo, a real estate agency that specializes on the housing market in Berlin. In popular areas such as Moabit it is possible to find quality real estate for 2000 or 2500 € / m². However Berlin’s real estate market does not embodies the rest of Germany. Munich and Hamburg are much more expensive and are about prices are at 5,000 to 6,000 € / m², depending on the district.
Introducing Alur law as a threat to rent increases, Le Particulier Immobilier, a monthly magazine focused on in-depth articles on the real estate sector, presents this government measure which will be implemented by the end of 2014. Supposed to manage the imbalance between supply and demand in urban areas of over 50 000 inhabitants, Alur law concerns equally bare rentals, furnished rentals or flat-sharing rentals. “It is based on the establishment of reference rents, which are themselves determined by local observatories of the rental market. New yardstick, the benchmark rent plus 20% becomes the yellow line to the landlord.”
A similar arrangement exists in Germany: the Mietspiegel (rent index). Nevertheless, the differences are extreme and the new German leases are not affected by this measure.
The opinion of Arnaud Schott (associate of ADEN Immo in Berlin) … about the german system
The French system of rent limitation is strongly geared to the German example. However, the system of rent limitation alone does not explain the balance envied by the French: a decreasing demographics, a large housing stock and the absence of major cities, creating a similarly wide appeal, such as Paris, contribute to the moderation of inflation in Germany. And in spite of the German system of rent index, Berlin, the city that knew no tense rental situation until a few years ago, saw the significantly increasing rents, while more and more new residents have moved.
In Germany, the rent limitation is not bound by any official rule, which means that each owner or tenant may lay down a "reasonable” amount of rent of his object by dragging the website of the local authority for advice. In contrast to the French rental oversight bodies, the German observatories have a luxury catalog of criteria to refine the calculation, such as the situation of the district, or the equipment level of the building and the apartment. The French have only the criteria that take into account such as the number of rooms and the date of construction of the building. The tenant may ask a judge if the by him accepted rent exceeds the limit by more than 20% of the rents of comparable properties. Not infrequently, they argue against the tenant – if the excess is not more than a span of 30 to 40%, that he has signed the contract freely and has to bear the consequences of this agreement. If there isn’t any index clause in the lease available, the owner may request a rent increase up to 15% over a period of three years (but not earlier than one year after completion of the contract and not later than every 18 months).
The introduction of the rent index had certainly a positive effect, since the danger of questioning of high rents meant that the lessors had to moderate their claims. Similarly, thereby inflation was reduced. Nevertheless, we can’t ignore the cultural factor: a lack of antagonism and the desire of balance in the owner-tenant relationship, which are more available in Germany than in France.
The edition (N° 20594) from the 9th of april 2011 of the french newspaper Le Monde contains a special issue about the development of real estate prices in the big european cities. In difference to most of the major cities, where the prices exploded, Berlin remains affordable.
Although prices in Berlin also have risen since 2006 about 14%, having a record year in 2010 (+7,9%), the property prices are still far below the prices of other European capitals as Paris or London. Today, the prices lay between 1000 – 4000 € per m² in the most chic districts such as Mitte or Prenzlauer Berg, slightly lower in Kreuzberg and Friedrichshain.
According to the article the Berlin housing market was underestimated for a long time and now slowly is starting to adapt to the prices of other German cities. This rising trend is also influenced by the economic boom in Berlin. More and more business companies are settling in the city, followed by a young working population. Foreign investors have also recognized the potential of Berlin and take part in the price increase.
The article cites our associate Arnaud Schott, who explains that the advantages of Berlin are the recently renovated residential buildings, attractive prices and the system of maintenance funds that allow to keep the building in good conditions. Berlin offers a lot of opportunities for those who want to invest in stone with little risk.
To obtain more information about the topic do not hesitate to contact us, we are available in our two offices in Berlin and Paris. Just call or write us a mail. You can also check our website for further information.
The broadcast of Sunday the 2nd of October on the French channel M6 ‘enquête exclusive’ points at the evolution of the German capital Berlin concerning both life style and Berlin’s transformation since the end of the GDR.
It permits following one of the originators of ADEN Immo Arnaud Schott, expert in the Berlin’s real estate market, and shows in doing so the attractiveness of the German capital for international students, French professionals who are settling in Berlin or investors who want to capitalize on Berlin’s real estate market which is 4 times less expensive than that of Paris.
You are following during the broadcast Arnaud Schott at the moment of an apartment viewing as well as in the agency ADEN Immo in Berlin. We are thereby able to accompany a French customer viewing a gorgeous 3-room apartment of 275.000€ in the middle of Berlin, mission impossible in any other European capital.
Author: David Nguyen
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