In the media
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.
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.
In der Ausgabe Nr.465 (19.02.2016) gibt die französische Wochenzeitschrift „Le Figaro Magazine" einen Einblick in die Vermietung als Investition in Frankreich. Die Lage hat sich für Investoren verschlechtert: die Rendite einer vermieteten Wohnung in Paris ist so niedrig wie nie. Dies ist eine Folge der sogenannten „Loi Alur“, ein Gesetzespaket, das unter anderem eine Beschränkung der Miete in manchen Städten Frankreichs vorsieht.
Französische Investoren, die eine höhere Rendite wollen, müssen jetzt neue Wege gehen: entweder in anderen Städten der eigenen Heimat investieren, oder im Ausland ihr Glück versuchen. Die Journalistin Colette Sabarly hat David Nguyen, Mitgründer der ADEN Immo GmbH, nach den Vorteilen einer vermieteten Wohnung in Berlin als Kapitalanlage gefragt.
„In Berlin ist die durchschnittliche Rendite von 3,6% bis 3,8% gerade nicht sensationell, doch man kann mit einer Gebäudeabschreibung in Höhe von 2,5% vierzig Jahre lang rechnen. Hinzu kommt, dass der Gewinn aus dem Verkauf einer Immobilie 10 Jahre nach der Anschaffung [in Deutschland] nicht versteuert wird. [Bei einer in Deutschland vermieteten Wohnung] werden auch keine Sozialabgaben von der Rendite abgezogen.“
Laut der Journalistin überzeugen diese Argumente mehr und mehr französische Investoren, eine Wohnung in Berlin als Kapitalanlage zu kaufen. Der Berliner Immobilienmarkt zeigt auch eine hohe Wachstumsrate, die einen vorteilhaften Gewinn bei dem Verkauf verspricht.
Berlin is not “the poor but sexy city” anymore, as the former mayor, Klaus Wowereit, said. A dynamic growth has been set up. The real estate prices rose by 10% last year. “All indicators plan that the price increase will keep going: 15 000 accommodations are missing per year” and the new law on the rent regulation system, which has come into force on June 1st, does not seem to stop this market pressure. It appears to be even “counterproductive”, Arnaud Schott noticed. “I get the impression that everything remains the same as before with just the difference that there are less available apartments on the market”.
What is the state of the real estate market in Berlin?
The Berlin real estate market is very attractive today, since prices are really low compared to those applied in other European capitals and also to those applied in other German cities like Munich or Hamburg. Our market has kept rising for six years now and probably will not stop increasing, because demand is currently greater than supply. […]
Why did you set up a Franco-German real estate agency specialized in Berlin’s market?
[…] At that time (in 2008), we observed that French people who wanted to buy [in Berlin] found themselves in difficulty, as the sale process is different. […] The language is also a barrier. Therefore, we set up ADEN Immo so that buying in Berlin would be as simple as in France. Our team is bilingual which makes the dialogue easier. However, more than 50% of our customers are German. We also created the concept of real estate agency since there is practically no real estate agency in streets in Germany.
You can find the whole French article in the magazine Hebdo-BOURSE PLUS number 804, published on July 24th 201, or online with the following link: http://www.hebdobourseplus.com/hebdo-bourse-plus_la-vie-de-l-immobilier_111_804.html
More and more French people move to Berlin and “an increasing number turns to Berlin to invest in rented apartments”. At ADEN Immo, “the investors represent 60 to 70% of the French customers from now on”. Those see in Berlin low prices per square meter compared to those applied in other European cities, as well as the opportunity to make profit. “Real estate prices rose by 10% during the last year”. Moreover, although the rental yield remains low, it does not put investors off since the unpaid rents remain unusual and because finding a tenant is easy. Finally French people are also lured by the very attractive German tax law. David Nguyen maintains: “80% of ADEN Immo’s customers pay no tax at all”. Thus, this craze enables ADEN Immo to “close around fifty red, white and blue contracts every year”. Will you be one of them?
While in France, “the hopes of an additional value at the resale” remain hypothetical “and the rental yield limited by the system of taxation makes buying less attractive, in Germany the market keeps attracting investors.
In fact, the prices are still 15% to 20% underestimated and are only slowly reaching the price levels of other European metropoles. The inflation of the real estate market has led the German government to introduce a rent regulation system. However, experts wonder about its efficiency in the future. “So, prices and rents should keep rising. Especially in Berlin, where the vacation rate is under 1,8 %”. Furthermore, the tenant is not secured in case of unpaid rents in Germany and the “German-French tax convention benefits especially the French investors.” Therefore, an investment in Germany is very profitable. Please note that you can find financial means easily as in France, where you have to provide existing asset in France as guarantees, as in Germany, where a loan can be at 50% of the purchasing price.
While the “loi Alur” is controversial in France, in Berlin, the rental control of already existing leases was introduced in the 70’s. The federal government recently changed the law, which limits more owners for the new location. However Berlin continues to attract always more investors. Indeed, the estate price and the cost of living remain quite low compared to the other European cities. The unemployment rate has also fallen since 2005. Moreover “The taxation is a good reason to invest in Berlin since it rests on the value rental thanks to the writing-off of the good and a tax exemption for the profit after having the good for 10 years”. Berlin always captivates more and more people and is now the 4th European urban areas thanks to its positive migration.