Berlin real estate, rents spike amid foreign investment

Michael Heinze says his landlord is trying to force him out of his trendy Kreuzberg-district apartment — the owner wants to sell it because these days, Berlin property has become lucrative.

“He accused me of not paying the rent, of defamation, of all sorts of things to try and intimidate me into moving out,” said Heinze, 69, who says his rent has doubled in the past few years. “It got to the point where I started to wonder if he had a machine constantly churning out eviction notices.”

Long a mecca for artists and other creative types with its cheap housing, hip neighborhoods and “poor but sexy” character, Berlin’s property values have jumped 30% to 50% in the past three years, and doubled in the past eight. That has led to locals fretting over the skyrocketing rents they say threaten the vibrant, creative vibe of their city as well as their homes.

That sharp increase in real estate prices is attributed to the financial crisis in 2008 and the euro crisis that followed, analysts say, as concerned Europeans looked for somewhere to safely park their cash. While property has generally been seen as a safe investment, German property has been viewed as the safest bet — especially in cheap Berlin, where real estate goes for far lower than in other European capitals.

As a result, Greeks, Spaniards and Italians — anxious over the financial future of their cash-strapped economies at home — poured in to buy.

“Many buyers were feeling so insecure that they would try and buy apartments blindly, without having seen them,” recalled Ruth Stirati, head of a real estate firm in Berlin that specializes in catering to Italian buyers. “The worse the crisis became, the more inquiries we received.”

Stirati said business spiked sharply in November 2011 – two months after the Italian parliament passed a raft of austerity measures that prompted mass demonstrations on the streets of Rome.

Rocketing property prices don’t seem to be putting off Stirati’s clients, who say Berlin remains as attractive as ever.

Italian filmmaker Franco Fracassi, 47, bought two apartments in Berlin in March and points out that although property values are increasing, prices still seem fantastically cheap compared with Rome.

“In Rome, an apartment goes for a least five times the price,” said Fracassi. “It’s just not a normal market there.”

In addition to the income from renting out his apartments, Fracassi said he invested in Berlin because he likes the city.

“It’s a nice city and I have not ruled out moving my family over there,” he said.

Italian banker Valter Badariotti, 40, said he bought three properties in Berlin because London and Paris were too expensive. He also worries about the deteriorating economic situation in Italy.

“I have to think of the future,” he said. “My children, ages 3 and 5, might go to university in Berlin.”

These euro crisis refugees, however are causing an uproar in Berlin, with locals blaming Greeks and Italians for the steep property price hikes. It has even become an issue taken up by all political parties ahead of September’s federal elections.

Even so, Roland Bomhard, head of real estate at law firm Hogan Lovells, says buyers investing in Berlin residential real estate are still overwhelmingly German, with foreigners accounting for only roughly 30% of all new buyers in recent years.

“(Mortgages) are really cheap in Germany and readily available for residential investment, much cheaper than in basically any other country in the eurozone,” he said. “In Berlin you buy the stability of Germany with almost an Eastern European perspective for growth.”

Lucas Bauernfeind, 28, a native Berliner, says the city is no stranger to change, and the shift in attitudes toward property ownership as well as the property boom is just the latest thing to hit the city.

“It’s like that famous quote – ‘Berlin is a city condemned always to become, never to be,’ ” he said.

Even so, some locals continue to fight to keep their city’s character intact and residents in their homes.

“No to speculation!” chanted protesters defending residents of a building in Berlin’s well-heeled Mitte district from being driven out last week after eviction notices were sent by its owners looking to sell. “We’re all staying!”

Retiree Angela de Ridder, 65, is fighting the same fight. Since 1976, de Ridder has lived in an apartment in a converted factory.

The landlord is trying to evict her to sell the building, she said.

Neither Heinze’s nor de Ridder’s landlords could be reached for comment.

“When I moved in, this apartment had nothing — no sockets, no fixtures, just cold running water — I built everything in myself,” she said. “My rent has gone up eight times since I moved in. If they manage to evict me, they could probably sell this flat for around a million euros.”

Source – http://www.usatoday.com/story/news/world/2013/04/28/berlin-real-estate-price-rise/2094463/

Moving to Berlin From the UK

Moving to Berlin

Imagine a city brimming with diversity where tolerance is the golden rule. Imagine a city with so much visible history that it feels like the world’s largest open air museum. Imagine a city where the arts and culture flourish, attracting musicians, performers and artists from all over the world. Imagine a city where there’s a welcoming smile in every establishment and where the bars and clubs stay open till dawn. Now imagine a city where the rents are affordable, the infrastructure almost flawless and employment opportunities are plentiful. Imagine too a city where eating out won’t cost you an arm and a leg.

Imagine all these things together and imagine Berlin.

Berlin is Germany’s largest metropolis and a state in its own right within the Federal Republic. Sitting on one of the key trading routes between east and west, Berlin has been part of many kingdoms, been ravaged in many wars, been fought over countless times, split in two and reunited. Remnants of this chequered history can be found everywhere in Berlin – from the Charlottenburg Palace to Checkpoint Charlie.

It’s unclear whether Berliners are racing away from this history or running to embrace the future but any new resident of Berlin is bound to find themselves swept up in a relentless energy that, if indulged fully, can leave you sleep deprived and caffeine-dependent.

(read more…)

Rental Disobedience: Resident Groups Combat Spike in Evictions

Skyrocketing rents in many German cities are pitting residents against real estate developers and landlords. The recent death of an elderly woman forced out of her apartment has emboldened alliances to protest evictions with sit-ins.

On the morning of the eviction, an hour after the bailiff has changed the locks, 10 protesters are standing in a small community garden between the apartment building and the subway station. One of them says: “I’m furious and sad and disappointed that we couldn’t prevent it from happening.” Another one says: “It’s too bad Rosemarie wasn’t here.” A woman named Sara Walther says: “Rosemarie didn’t have the strength to come.” (more)

Learning from the German model

Should Saskatoon be more like Berlin? Should Canada be more like Germany?

After spending a week in Berlin, I think we have a lot to learn from the way Germans do things.

Here is what I noticed: Berlin is very densely populated. People live in low-rise apartments. Detached homes are rare. There are parks, playgrounds, and plenty of services (such as small grocery stores) everywhere. People walk, ride bikes, eat well and seem comparatively slim and fit. There are plenty of cars, but they are mostly parked. Why drive when public transit is incredibly efficient and reliable? Car traffic is light. Air pollution is imperceptible.

All in all, Berliners enjoy a much more attractive, interesting and human city than we are used to in Canada. Their more enlightened urban form is one reason Germans get by on close to half the energy we do per capita. And Germans use less energy all the time, get more of it from renewables and emit less greenhouse gases.

German Cities Plan Tighter Rent Controls to Curb Housing Boom

Germany’s largest cities are preparing to tighten rent regulations as they take advantage of a new federal law aimed at curbing the housing boom.

State governments that oversee housing rules in Hamburg, Berlin, Munich and other cities plan to make it illegal to raise rents in those locations by more than 15 percent in 3 years, according to government officials.

“Rents in Hamburg are quite high and we’re discussing different options to regulate them,” said Kerstin Graupner, a spokeswoman for Hamburg’s urban development agency. “We expect to apply the new law in some form.”

Rents in Germany’s largest cities have soared as home construction has failed to keep pace with an influx of people. On average, German rents rose 15 percent in the past five years, according to data compiled by online broker Immobilien Scout.

In December, the German parliament passed a law that allows state governments to cap rent increases in certain areas at 15 percent every three years, compared with 20 percent previously. The law comes into effect next month. (more…)

German Cities Plan Tighter Rent Controls to Curb Housing Boom

Germany considers new property taxes for EU bailouts

Germany is mulling new ways to raise finances to prop up the euro currency. Advisers to German Chancellor Angela Merkel are suggesting the weaker economies of southern Europe should levy property and asset taxes, to support future bailouts.

The Telegraph reported German economists are pushing property owners to pay new taxes. Professor Peter Bofinger said: “Over the next 10 years, the rich should give up a portion of their assets.” The Cyprus bailout was the first one to involve a tax on savers. Digital Journal reported EU Commissioner Michel Barnier last week proposed a bill which will clarify rich savers will have to expect to contribute to future bailouts. Bofinger however pointed out “the resourceful rich just move their money to banks in northern Europe and avoid paying.” Indeed, capital flight from rich depositors was rampant prior to Cypriot banks closing, leaving the accounts of business owners and frugal savers to be plundered. German economists are now voicing the opinion that people in the southern European countries requiring bailouts are richer than those in Germany due to a higher proportion of home ownership which leaves homes ripe for taxation. Capital reported the ECB survey showed a higher paper wealth in some of the cash strapped Mediterrean countries than in Germany, noting “high private-sector wealth didn’t prevent governments in southern Europe from racking up large debt burdens.” Emergency property taxes were introduced in Greece in 2011. However the taxes did not only target the rich, but every homeowner. To ensure the taxes were collected the government decreed the tax was added to electricity bills. As Ekathimerini reported the result is 1,000 customers have their electricity disconnected every day as they struggle to pay the property tax. The Athens court declared the collection of the tax via electricity bills illegal last year but the government overrode their decision as the tax is raising an additional €3 billion each year which may otherwise go uncollected. In the recent round of troika negotiations the creditors insisted the emergency property tax remain in place. The German idea of property taxes to raise funds towards bailouts is not new as Greece illustrates, just as Cyprus was used for the depositors tax. The ECB report noted “The role of home ownership is sizeable” but estimates of individual wealth from property fails to reflect declining property values.
Read more: http://www.digitaljournal.com/article/347996#ixzz2QejTzlDH

Berlin’s skyrocketing rents leading to forced evictions

Investors from crisis-hit EU countries are helping drive up prices

In one part of Berlin, a Turkish family is being evicted from the flat they have lived in for 21 years. In another neighbourhood, an entire block of tenants is taking their landlord to court.

All across the city, rents are increasing while salaries stagnate — forcing longtime Berlin families out of their homes to the outskirts of the city, where they can afford to live.

“We are here at Wriezener Strasse in front of a building where an eviction will be happening soon,” said George Ledjeff, one of about two dozen people protesting outside the flat of Sevdi and Asyun Turkan, who recently lost a court challenge over a rent increase they say they couldn’t afford.

“It’s a very big problem,” said Ledjeff, who has himself experienced a forced eviction by the same company. “Every year at least seven to eight thousand people are evicted by force and there’s no system to take care of them. This family has a small kid. It’s awful. We are here to support the victims so they know they are not on their own. There are people caring for them.” (more)

Property developer tears down further stretch of Berlin Wall

A property developer removed more of the Berlin Wall on Wednesday in a surprise dawn move amid a bitter running protest over the dismantling of the once-detested Cold War division.

Four segments were taken down from around 5:00 a.m. (0400 GMT) from the Wall’s longest surviving stretch, creating a gap of more than six meters (20 feet). But the property company said it was only a temporary measure.

Some 250 police were dispatched to the site.

Opponents have organized a rally for Thursday after several protests along the 1.3-kilometer (nearly one mile) stretch of Wall, known as the East Side Gallery, since the beginning of March when a first panel was taken away.

Investment group Living Bauhaus, which is building a residential development behind the Wall, said Wednesday’s removal was temporary to provide access to the construction site.

“The parts of the Wall, 6.10 meters altogether, are subsequently to be inserted again into the Berlin Wall that is still standing,” it said in a written statement.

It had been necessary because talks with local officials and investors in neighboring plots of land had provided “no realizable alternative” after four weeks, it added.

US singer and actor David Hasselhoff, who gave a legendary New Year’s Eve performance of his song “Looking for Freedom” at the Wall after its fall in 1989, has joined protesters.

Since 1990, the outdoor gallery has been covered in brightly colored graffiti murals, including the famous “Fraternal Kiss” depicting Soviet leader Leonid Brezhnev and East Germany’s Erich Honecker locked in an embrace.

The 3.6-meter high stretch is a tourist magnet and a must-see for history buffs retracing the dark chapter of Berlin’s 28-year-long division who are otherwise hard pressed to find remnants of the Wall to photograph.

Developers have previously said that plans to provide access to a high-rise residential development along the banks of the Spree river as well as access to a planned bridge required a 22-meter segment of the Wall to be dismantled.

A meeting between the property company and city authorities on Tuesday about possible alternative sites for the project proved fruitless.

Lutz Leichsenring, of Clubcommission Berlin, one of the protest’s organizers, said that although a solution by finding replacement land was “within reach”, a “serious readiness” by the Berlin government to correct past urban development mistakes was lacking.

Thrown up in 1961, the Wall stretched 155 kilometers (96 miles) and divided Berlin until 1989, but today only around three kilometers of it still stand.