• Berlin apartment prices up 21% in a year (CBRE)
• City population growing at twice the rate expected (Berlin Senate)
• Berlin one of top European residential property investment hotspots for 2016 (Property Frontiers)

25 years ago, the world watched in wonder as the first pieces of the Berlin wall came down and the broken city began a long healing process to make it whole once more. Now, no longer content to view this vibrant city from afar, it seems the world has decided to move to Berlin!

The Berlin senate revealed over the summer of 2015 that the city’s growth is double the rate that city planners had expected and prepared for. Berlin’s population was expected to swell by 250,000 people between 2011 and 2030. Now, city planners believe that number will be added by 2019. In 2014 alone, the population grew by 44,700.

City development senator Andreas Geisel has described the growth as “a great blessing” but it has also put pressure on infrastructure, with the need for housing increasingly sharply as a result.

For owners of residential property in Berlin, the city’s newfound popularity has led to some interesting developments. CBRE’s Global living: A city by city guide reports that average values for apartment buildings have risen by 21% in a single year. Rents have also shot up, by 5.7% over the past year (compared with 3.6% nationally).

Ray Withers, CEO of specialist property investment company Property Frontiers, which is offering high specification buy-to-let apartments in the city at Stadtpark Steglitz from €153,670, comments,

“We’re seeing some rapid shifts in Berlin’s property market after almost two decades of very little activity. It’s an exciting time to be part of the market there and property investors around the world are looking to Berlin as one of Europe’s top residential real estate investment destinations. Berlin looks set to be one of Europe’s most dominant cities during 2016 so far as residential investment is concerned.”

As well as a vibrant arts scene and rapidly growing reputation as Europe’s hottest start-up hub, Berlin offers a low cost of living compared to many European cities. Rents are less than a quarter of the price they are in London: around £405 in Berlin compared to £2,080 in the English capital, according to CBRE. At the same time, the city’s economy is growing (CBRE cites projected growth of 2.6% for 2015) at a strong and sustainable pace.

With 81.2% of the city’s population opting to rent their property (compared with 51.3% nationally) Berlin represents a huge opportunity for buy-to-let investors looking to pick up a residential investment in a European hotspot. The high spec apartments at Stadtpark Steglitz present the perfect opportunity, located in an affluent area of the south western part of the city, with up to 5.6% yield and excellent capital growth expected.

For further details, visit www.propertyfrontiers.com or call the team on +44 1865 202 700.

• Berlin rated top 2015 investment prospect (PWC)
• Residential property investment topped €2.2 billion in H1 2015 (JLL)
• 20,000 new homes needed this year in Berlin to meet demand (Federal Institute for Research on Building, Urban Affairs and Spatial Development)

The face of Berlin is changing. The German capital is increasingly becoming seen as Europe’s go-to city for bright young things, creative start-ups and anyone who’s anyone in the tech sector. In addition to its business offering, it has a thriving social scene, a great retail offering and a vast array of cultural attractions.

Such a dynamic business environment with strong demand for rental properties has begun to attract serious numbers of investors to Berlin. According to the PWC Emerging Trends in Real Estate Europe 2015 report, the city was rated the top for investment prospects in 2015. Such is the popularity of Berlin’s combination of inexpensive assets and development opportunities that it has knocked Munich off the top spot. Furthermore, Berlin now stands as Europe’s third most active real estate market, according to the PWC data.

Ray Withers, CEO of specialist property investment company Property Frontiers, spotted Berlin’s potential some time ago. Property Frontiers is offering investment at Stadtpark Steglitz, located in one of south west Berlin’s affluent areas. The residential apartments are perfectly suited to Berlin’s young, ambitious population, offering modern living solutions with open plan, spacious living areas. Prices start from €153,670, with gross yields up to 5.6% realistically expected and no capital gains tax if the property is held from more than 10 years.

Ray Withers comments,

“Berlin is racing ahead of other European cities in terms of its ability to attract young, talented entrepreneurs and the impact of these bright young things on the city’s demographics is far from negligible. They’re breathing new life into Berlin and drawing in investment capital from around the globe.”

According to JLL, residential properties in Berlin attracted more than €2.2 billion of investment during H1 2015, up more than four times on the same period in 2014. Demand for property is high as a result of the city’s growing population. According to the Federal Institute for Research on Building, Urban Affairs and Spatial Development, 20,000 new homes are needed this year in order to keep up with demand. Yet in Berlin, as in many other cities in Germany and across Europe, supply is struggling to keep pace with demand.

The situation presents one of those fantastic investment opportunities that is perfect for real estate investors looking for a hands-off property investment in a hotspot that is packed with potential. The volume of new start-ups, tech and media companies in Berlin promises big things for the city’s future and savyy investors are racing to be part of the action.

For further details, visit www.propertyfrontiers.com or call the team on +44 1865 202 700.

• Rents in Berlin up by 9% in 2013/14 (JLL)
• New rent cap allows for 20% rent increase every 3 years
• 20k new properties needed in Berlin every year (JLL)

Berlin is the first city in Germany to introduce a cap on what landlords can charge new tenants. The rent-control legislation has come into force in a bid to control some of the fastest rising rents in Europe. As a result, landlords in Berlin are now limited to raise rents by no more than 10 per cent above the local market average; a cap that was already in place for existing tenants but, under the new rules, has been extended to new tenants too.

Between 2013 – 2014 rents in Berlin increased by more than 9% according to Jones Lang LaSalle – making the capital home to some of the fastest-rising rents in Europe.

But whilst the rent controls are bound to bring extra stability for tenants, what does the cap mean for landlords? Here are five reasons why investing in Berlin means landlords are still onto a winner:

1. Tenants stay for longer

Rent controls discourage tenants from moving frequently because they have more certainty that prices will not rise too steeply, too fast. German tenancies are typically long anyway – in fact, they are generally open-ended. For landlords, this means that tenants can stay in their apartments for decades on the same contract – eliminating the cost and hassle of finding new tenants every 2-3 years, as is typical in the UK.

2. Substantial rental increases every 3 years

The cap means that rental increases will be restricted to 20% within three years, unless an event such as modernisation of the property has taken place that warrants an earlier increase. However, as any experienced investor will tell you, a 20% increase every 3 years is still considered a substantial gain.

3. New build properties are excluded from the rent cap

Many investors are switching their focus to new builds in Berlin, which are excluded from the rent cap, such as the brand new buy-to-let opportunity at Stadtpark Steglitz from leading buy-to-let specialists Property Frontiers. The collection of studios, one, two and three bed apartments has been hugely popular amongst those looking for excellent capital growth potential and as new build apartments are excluded from the rent cap, it means landlords can maintain a healthy rental income.

4. Berlin’s housing market continues to thrive

Despite the rental cap, investors can still expect their buy-to-let property to get snapped up quickly, due to high demand for accommodation thanks to a growing population and shortage of properties available. According to estimates by Jones Lang LaSalle, at least 20,000 new apartments p.a. will be required over the next few years to return equilibrium to the residential market.

5. Keeps the city affordable

Although rents in Berlin are still low compared to other European cities, the rent cap is vital to keep the city affordable for lower-income residents. The rent cap will ensure that Berlin does not become another priced-out city like London or Paris, both of which are forcing tenants with lower incomes to seek properties outside the city because they simply cannot afford the rent in prime areas. The rent cap will maintain a healthy rental market and should not have a dampening effect on new build properties.

For further details, visit www.propertyfrontiers.com or call the team on +44 1865 202 700.

• Just 18% of Berlin’s residents own their property (Buy Berlin)
• Berlin rents up 9% from 2013 to 2014 (JLL)
• Low entry point of €109,600 attracting global interest in buy-to-let (Property Frontiers)

“When you look at a property investment, always think it through to the end. Know your exit strategy from day one.”

Sage advice from Ray Withers, Chief Executive of leading property investment specialists Property Frontiers. Withers has been at the helm of the company for over a decade, overseeing successful client investments in properties around the world. The company’s latest offering, the high spec collection of studio, one, two and three bedroom apartments at Stadtpark Steglitz in Berlin, provides an excellent illustration of Withers’ point.

Germany – and in particular Berlin – has been a nation of renters for decades. According to Buy Berlin, just 18% of the city’s residents are owner-occupiers due to the housing subsidy legacy of the old East German government. Across the country, ownership remains low, with only around half of Germans owning a home. The only country with a lower home ownership rate in Europe is Switzerland.

However, a national shift in perspective has created an interesting change in the makeup of Berlin’s residential population. Now, increasing numbers of renters are becoming buyers, giving the property market a new lease of life. Michael Schlatterer of CBRE Germany comments,

“There is a shift towards owner-occupation, that’s for sure. You can see that the trajectory for condominium purchases is going up.”

Rent rises are one of the factors behind the new German interest in buying property. According to Jones Lang LaSalle, rents in Berlin have risen from €5.50 per square metre in 2005 to €9 per square metre in 2014. From 2013 to 2014 alone, rents rose by more than 9%. While Berlin has responded by introducing a rent cap, many tenants have already had their heads turned by the prospect of property ownership.

Continuing low interest rates across Europe and Eurozone-related uncertainties have also caused many Germans to look at buying property, as they seek out the best ways to make their savings work for them in this post-Great Recession world. Andrew Groom of Jones Lang LaSalle comments,

“We’re at the start of a re-pricing period of anywhere between two to five years. Prices in Germany have tended to be stable for long periods of time, and have then been driven by bigger macro-economic political events. We’re going through a macro-economic situation now, which is driving Germans back into bricks and mortar.”

This shift in national attitudes across Germany has served to create an interesting opportunity for overseas investors in cities like Berlin. As the housing market takes on a new dynamic, buy-to-let properties like Stadtpark Steglitz have become increasingly appealing, with the more active market offering a realistic exit strategy. Apartments there are available from €109,600, with gross yields up to 5.6%. Property Frontiers’ Ray Withers comments,

“We’re experiencing a real upturn in demand from investors for property in Germany and in particular in the capital. As the Berlin market shifts its focus, international investors are seeing a new and realistic exit strategy open up before them. Combined with the stability of Germany as an investment prospect, Berlin has quickly become one of the most exciting residential property investment destinations in Europe.”

For further details, visit www.propertyfrontiers.com or call the team on +44 1865 202 700.

• Prime residential real estate prices up 9% in Berlin (Knight Frank)
• Berlin population increases by 1.5% in 2 years (Economist)
• 40k new companies per year founded in Berlin (CBRE)

The largest national economy in Europe, Germany ranks 16^th in the world in the 2015 Index of Economic Freedom, which considers matters such as fiscal freedom, government spending and investment freedom. Germany’s highest scores in the ranking were for property rights and investment freedom. Combined with a booming property market, swift growth in cities such as Berlin and intense demand for rental accommodation, this is serving to make buy-to-let investments in Germany some of the most exciting in Europe.

According to the Knight Frank Prime International Residential Index (PIRI), city markets are performing so well of late that they have even outperformed second home sun and ski destinations. The PIRI tracks annual price changes in 100 city and second home locations and found that Germany’s leading cities were enjoying significant prime residential real estate price rises, with Berlin at 9%, Munich at 8% and Frankfurt at 7.5%.

Ray Withers, Chief Executive of leading property investment specialists Property Frontiers, explains,

“Germany has long been a nation of renters, with low rents creating some fantastic city communities. Berlin, in particular, is known for its vibrant neighbourhoods packed with artists, students and hip, young professionals. Of late though, low interest rates across Europe have encouraged Germans to turn to property as a more profitable alternative to savings accounts. With interest from international investors picking up as well, rents are on the rise and the buy-to-let market has become increasingly appealing.”

Against a background of rising property prices (the Economist reported an increase of 20.3% in Germany in the five years to Q4 2014), Berlin has experienced rapid population growth. Its population grew by 1.5% between 2011 and 2013, to 3.422 million. In 2013, a further 50,000 new residents arrived in the city.

New arrivals are flocking to districts within the S-Bahn urban railway catchment area, avoiding the centre in order to balance rent levels with better availability of residential space. Steglitz-Zehlendorf is a prime example. Home to one of Berlin’s most attractive commercial districts, Schlossstrase, which is packed with shops and restaurants, the green and leafy neighbourhood is drawing in wealthy professionals and well-to-do families looking to rent high quality homes.

It is also home to Stadtpark Steglitz, a contemporary development of stylish apartments named after the 17 hectare city park of the same name, which is one of the area’s most attractive features. The development is spread across three buildings (one refurbished and two newly built) and includes apartments ranging from studios to three bedrooms. Prices start from €109,600, with gross yields up to 5.6%.

According to the CBRE/Berlin Hyp Housing Market Report Berlin 2015, the employment market and incomes in Berlin are growing in tandem with the city’s economy. Berlin Hyp AG management board member Gero Bergmann succinctly sums up the city’s current position,

“All in all, Berlin is one of the most exciting and, in many respects, most promising locations in Europe.”

Woven through the city’s economic success are strong industrial and entrepreneurial strands. Industrialists accounted for 105,000 of Berlin’s jobs while 40,000 new companies are founded there per year, according to the CBRE.

Over the past decade, Berlin has transformed from one of Germany’s worst-performing regions to its most exciting success story. Economic growth is continuing to draw in new residents with a hunger for a bright future from across the country, and indeed from other countries too. Berlin’s time is now and savvy property investors are queuing up to be a part of its future.

As the Telegraph recently concluded,

“Berlin is a ‘no-brainer’ for British property buyers.”

For further details, visit www.propertyfrontiers.com or call the team on +44 1865 202 700.