Berlin’s rental market a nightmare to many

The German capital’s rental market is undergoing dramatic changes. The amount of affordable apartments to rent is has been going down, and a trend reversal is not really in sight, as DW’s Janelle Dumalaon reports.

Couples, students and young professionals mill around in front of a building in south Berlin’s trendy Neukölln district, drawn by an advertised viewing of a studio apartment. Around 20, then 30 hopeful flat-hunters patiently trudge up the stairs to the fourth floor, to inspect the 40-square meter studio apartment.

An hour later, at another viewing for another, slightly bigger apartment a block away, the same group of people, save for a few additions, would run into each other again – and probably not for the last time. It came as a result of surprise to few of them – by now, most have learned that competition for an apartment to rent in Berlin is increasingly fierce, and only an exhaustive search bears fruit.

Berlin, once known for the cheap housing that’s attracted especially artists and other people from creative disciplines, is struggling to cover a demand that’s skyrocketed in the last years, pushed up by increasing migration to the city.

Lengthy landlord wishlists

“The competition is the hardest part,” said Angela Buch, a Berlin-based editor of scientific publications. I go to these mass apartment viewings, I’ve even been to one where 80 people came at a time.”

The demand means landlords and lessors really are spoiled for choice, Buch said.

“The application requirements for applying for an apartment are getting more and more outrageous,” said Bush. I’ve had to submit complete bank account statements, and many landlords want to see proof of permanent job contracts, which not that many people really have in Berlin.”

http://m.dw.com/en/berlins-rental-market-a-nightmare-to-many/a-19213690#fromDesktop&xtref=https%3A%2F%2Fwww.google.com%2F

Germans flock to property as interest rates fall and rents rise

Unlike his parents who rented their whole life, Berlin resident Sebastian lives in his own apartment and is considering buying a second property in the German capital as an investment to top up his pension one day.

For decades a nation largely of tenants and prudent savers, growing numbers of Germans are buying property, not just to own their homes but also in search of investment returns they can no longer earn on their bank savings.

This shift to a more U.S. or British approach to property is being encouraged by the European Central Bank’s cheap money policies and rising rents, especially in German cities.

A growing urban population and unexpectedly high immigration are pushing up a housing market where construction rates had been low for years.

“I’ve a private pension scheme, but despite diligent saving, it hardly yields anything due to the ultra-low interest rates,” said Sebastian, a 38-year old management consultant, who asked not to be named in full because he does not want clients to know about his personal financial affairs.

While Sebastian bought his first apartment six years ago to escape rising rents, he now wants to buy a second property as a private retirement fund.

In the years that followed the fall of the Berlin Wall, property prices in the city were significantly lower than in the likes of London or Paris. But the German capital is no longer a cheap place to live.

“The problem now is: it’s really difficult to find an apartment in Berlin which is not totally overpriced,” said Sebastian.

Figures from the European Union’s statistics agency show 52.5 percent of Germans lived in their own home in 2014, well below the EU average of around 70 percent. But this is sharply up from 2006 when, according to separate data from the German Federal Statistics Office, the level was about 42 percent.

Strong demand for homes is fuelling a construction boom that is helping to support the German economy while exporters, who traditionally drive growth, struggle due to a slowdown in some of their major markets such as China.

In the last three months of 2015, construction was one of the biggest growth contributors while net trade was a drag. In the first two months of 2016, building investment further increased, raising hopes of a strong first quarter.

However, concerns are growing that a property bubble may be inflating at least in some cities. If it bursts one day – a scenario that could be created by rising interest rates, higher unemployment and changing demographics – owners and lenders alike could be hurt, posing a risk to medium-term growth.

A shortage of affordable housing is also forcing poorer families out of cities, widening the social gap in one of Europe’s richest societies and raising tensions after a record one million migrants arrived last year alone.

BENEFITING FROM THE BOOM

So far, Sebastian has benefited from the boom. After studying in London and Boston where rent ate up a large part of his scholarships, he returned to buy a 100 square metre (1,100 square foot) apartment in Berlin’s then up-and-coming Wedding district. For the 120,000 euro ($135,000) purchase, he borrowed 100,000 euros in 2010 on an interest rate of 3.8 percent.

“From today’s point of view, this was a bargain,” Sebastian said, adding that he could now probably sell the flat for twice the price, if not even more.

Many others have followed suit. Comparing prices on property websites has become a hobby for many Germans and real estate is a frequent topic of conversation at parties.

“The demand for owner-occupied flats in Berlin has been booming since 2010 and it has increased in the last two years,” said Christian von Gottberg, a real estate agent at the Engel and Voelkers.

First-time buyers tell Gottberg how landlords are raising rents for a third time within a couple of years. “So whoever can afford it, and has the financial means to meet the bank requirements for the deposit, opts for their own apartment.” Continue reading here – http://www.dailymail.co.uk/wires/reuters/article-3556269/Germans-flock-property-rates-fall-rents-rise.html

most expensive luxury flat sold in Berlin

The priciest flat by space in Germany was not sold to the elites in business-rich Bavaria, nor in the billionaire-dense port city of Hamburg.

Berlin, whose unemployment rate stands at twice the national average, holds the title of selling the most expensive apartment on the German market, according to Engel & Völkers real estate agency.

That flat was sold recently for a whopping €19,018 per square metre in the central Mitte district, newspaper B-Z reported on Tuesday.

This put it slightly ahead of the most expensive flat in Hamburg at €19,000 per square meter.

Engel & Völkers had recently released an analysis of the German luxury flat market, examining trends from apartments on sale in the first half of last year.

“Many new real estate developments in recent years have seen Berlin catch up considerably in the premium market segment,” wrote Engel & Völkers in the report.

But Berlin, dubbed “poor but sexy” by former mayor Klaus Wowereit, still has some catching up to do to be overall on par with its richer rivals in the north and south.

While Berlin’s ritzy Mitte flat was the most expensive by price per square meter, Hamburg topped the charts for having the most expensive flat in absolute terms at €13 million, followed by one in Munich at €12.6 million. The most expensive flat on the market in Berlin during this time period was €5.6 million.

In 2014, Berlin set a record when it sold a €5.7 million apartment in Mitte.

But the Bavarian capital last year did have the highest average prices for luxury flats (defined by Engel & Völkers as the highest five percent of the market). Munich “dream homes” average €4.5 million, compared to €1.6 million on average on Berlin.

continue reading – http://www.thelocal.de/20160413/berlin-sells-off-germanys-most-expensive-luxury-flat

German property seen reaping ‘reward’ of potential Brexit

The UK’s loss is Germany’s gain, as international investors worried about the implications of a Brexit scenario look beyond the Channel to mainland Europe. The uncertainties surrounding the EU referendum in June are leading to a certain stagnation in the UK market, as investors delay decisions until after the results have been announced.
Germany, with its unquestioned stability and safe haven status, is a striking contrast and the obvious alternative to the UK, experts agreed at PropertyEU’s Germany Investment Briefing, which was held in London this week at the City offices of TH Real Estate.
‘There is definitely more investor interest in the market as sentiment has switched away from the UK to Germany,’ said Karsten Kohlmann, managing partner of Waterway Investments, a transaction advisor in commercial real estate. As revealed by the surprise findings of a recent CBRE global survey, Germany has just overtaken the UK as the European destination of choice for international property investors.

A chronic lack of core product, along with investors’ increasing willingness to move up the risk curve, are making non-core and niche markets more attractive. ‘You can always find investors willing to buy, even in secondary cities and even if the building quality or the location are not perfect,’ said Kohlmann.

 

Continue reading – https://propertyeu.info/Nieuws/e949af06-360c-4313-a745-5317b402847f/BRIEFING-German-property-seen-reaping–of-potential-Brexit

Europe’s Emerging Bubbles

MUNICH – The European Central Bank’s latest policy moves have shocked many observers. While the goal – to prevent deflation and spur growth – is clear, the policies themselves are setting the stage for severe instability.
The policies in question include setting the interest rate on the ECB’s main refinancing operations to zero; raising monthly asset purchases by €20 billion ($22.3 billion) to €80 billion; and pushing the interest rate on money that banks deposit with the ECB further into negative territory – to -0.40%. Moreover, the ECB has launched a new series of four targeted longer-term refinancing operations, which also carry negative interest rates. Banks receive up to 0.4% interest on ECB credit that they take themselves, provided they lend it out to private businesses.

read more – https://www.project-syndicate.org/commentary/european-central-bank-fueling-asset-bubbles-by-hans-werner-sinn-2016-03

Cisco to pour millions into Berlin to turn German capital into a smart city

As part of a national effort to digitize Germany’s infrastructure, the capital city has been extremely proactive in making its utilities and services smart

Cisco will help Berlin build an mHealth platform in their latest project to turn the German capital into Europe’s leading smart city. In a deal announced over the weekend, Cisco and the Berlin Senate Department for Economics signed off on a memorandum of understanding (MoU) that will cover telemedicine (mHealth), cyber security and of course building a general network infrastructure to support the platform. It will provide easy access to patient data for hospitals, general practitioners, specialists, clinics and emergency services.

While it isn’t known exactly how much Cisco and the city will invest in this project, it is part of a much larger package wherein Cisco will invest $500 million in the national Deutschland Digital initiative over the next three years that will build infrastructure across the country for various services and push the testing of new communications technologies like 5G networks.

Anil Menon, Global President Smart+Connected Communities at Cisco, is working on a variety of similar projects around the world on behalf of the corporate giant. He is also vice chair of the World Economic Forum (WEF) Global Agenda Council on Future of Cities.

“We are proud to support Berlin in taking this important step,” said Cisco’s head of German operations Oliver Tuszik in a press release. “Digitization is a great opportunity for the city to benefit even more from its attractiveness. By signing this Memorandum of Understanding, we want to contribute to improving the quality of life for all citizens and give the Berlin economy an additional boost.”

A greater infrastructure for smart Berlin will include environmental and weather data, traffic information, and communications for police and fire. Senator Cornelia Yzer, who signed the MoU on behalf of the city, said the platform should “contribute to providing more efficient medical care to refugees,” and promote other projects for “digitization.”

Berlin’s race to be the smartest city in Europe

Berlin is gearing up for a bonanza of smart city, connected cars and upgraded digital infrastructure projects (Public Domain image by LoboStudioHamburg via Pixabay)

As part of that national effort to digitize Germany’s infrastructure, the capital city has been extremely proactive in making its utilities and services intelligent. Berlin announced a master plan called Smart City Berlin 2030 in April last year. That strategy includes the Smart City Berlin Network to run pilot projects throughout the municipality, “citizens’ right” to personal data security, a plan to build thousands of affordable new units with possible smart home integration for lighting and appliances, and simultaneously speeding up and simplifying the city’s bureaucracy.

“As Berlin sees it, cities which are viable are those which achieve a significantly higher or stable quality of life while using the same or a lower level of resources. This can only be achieved by means of an urban management which, by using innovative information and communication technologies…” the municipality’s Smart City Strategy reads.

It’s not the only city in the world pushing for new smart city infrastructure: Tel Aviv’s sister city Ramat Gan recently hosted a smart city competition, Jerusalem is upgrading to smart public utilities, Hyderabad recently opened an IoT and smart city accelerator, and Hong Kong is designating specific neighborhoods for smart city experiments.

The German capital has a soaring reputation as the hottest tech hub in Europe right now. There’s a growing e-bike industry, a flourishing culture for car-sharing and the Berlin startup scene even rivals London. Startupbootcamp has run its Smart Transportation & Energy accelerator program in the city for the last couple of years with plans to focus on the connected cars and automated vehicles space in the next stage of the program. It’s worth noting that Cisco is also an investor in Startupbootcamp, recently infusing $2.5 million into their London-based IoT accelerator.

The Smart City Strategy aims to recruit organizational partners, like Cisco, to make their Jetson-like metropolis a reality. But according to the city’s strategists, it will be a collective effort rather than a mayoral one that will get a city of futuristic services and flying cars off the ground.

“The most important partners are, however, the Berliners themselves because the overriding goal of Smart City Berlin is to further increase the quality of life of the Berlin population and the liveability of their city.”

Original Article – http://www.geektime.com/2016/03/20/cisco-to-pour-millions-into-berlin-to-turn-german-capital-into-a-smart-city/

Why German Housing Is Europe’s Best Property Market

The takeover party is over. Revelers are nursing wounds following a brawl. Stand back from the fray, however, and German housing still looks an unusually healthy asset class.

The shindig started three years ago, when two large portfolios of German homes— LEG Immobilien and Deutsche Annington, subsequently renamed Vonovia —were floated on the Frankfurt stock exchange by their private-equity owners.

A race to consolidate the fragmented sector ensued. A third company, Deutsche Wohnen, bought Berlin specialist GSW, while Vonovia bolstered its position as market leader by paying €3.9 billion ($4.4 billion) for another smaller rival. With share prices soaring, management teams and investors alike were having a fine old time.

The trouble started last September, when Deutsche Wohnen—now the number two player—made a bullish bid for LEG, the number three. LEG was game, but Deutsche Wohnen called off the deal to defend itself against a €14 billion hostile offer from Vonovia.

Deutsche Wohnen rushed through a €1.1 billion acquisition widely seen as an expensive poison pill. Vonovia’s bid fell through when it was supported by just 30% of shareholders in a vote last month.

Read more here – http://www.wsj.com/articles/why-german-housing-is-europes-best-property-market-1458664217

The world’s best cities for millennials

From affordable housing and transport to thriving job markets and culture, here’s our pick of the hottest spots for a good life

Affordability

Millennials are a boomerang generation. The number of 20- to 34-year-olds living at home with their parents increased by 25% between 1996 and 2013 in the UK. Last year, 58% of 20- to 24-year-olds, 21% of 25- to 29-year-olds, and 8% of 30- to 34-year-olds in the UK lived with parents. It’s a similar story in the United States, where one in five people in their 20s and early 30s live with their parents.

But when the family home is not an option, where should millennials head to make their money go further? YouthfulCities, a global index founded by consultancy firm Decode, ranked 55 cities on their affordability in 2015, using a range of statistics including, memorably, the number of hours needed to work at the local minimum wage to buy a dozen eggs (Detroit is top for egg affordability).

When it comes to rent, Berlin ranks no 1 among the 55 cities despite a 28% rise between 2007 and 2014, and the efforts of some landlords to beat recent rent cap legislation. Even so, according to living index Numbeo, a one-bed apartment in Berlin’s city centre will, on average, set you back £510 a month, compared with £1,680 in London.

Berlin is the best city for rent.
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Berlin is the best city for rent. Photograph: Matthias Haker/Getty Images/Flickr RF

In the US, a one-bed apartment in Dallas’s city centre costs an average of £860 a month; in New York, it is £2,070. Millennials take note: Dallas is now the third fastest growing city in the US, and has a vibrant young community, with 25% of its population in the millennial age bracket, which is unusually high for American cities.

On the other side of the world, Japan is surprisingly cheap: Osaka’s low city-centre rental fees of £410 a month may explain why Airbnb has seen such astronomical interest. The YouthfulCities index maintains it is less affordable than Tokyo, but that appears to be because of higher average costs when dining out, going to the cinema and paying for standing taxi fares.

Johannesburg is one of the most affordable of the sub-saharan African cities on the index: the average cost of renting a one-bed apartment is less than £263 a month. Despite moving 12 places up on Mercer’s latest cost of living ranking, Johannesburg is still the world’s 16th cheapest city to live in – and its wider province, Gauteng, is one of the powerhouses that helped South Africa avoid economic collapse last year.

Education

With fees for three-year undergraduate degrees costing up to £27,000 and maintenance support grants axed, one third of UK-based students aged 16 to 30 now consider undertaking some form of overseas study. But where should they go?

Higher education experts QS have compiled a list of the world’s top cities to be a student. The 2016 winner is Paris, which retains its place at the top for the fourth year running thanks to a high concentration of internationally recognised institutions, low tuition fees and strong employer activity.

Students at UCLA.
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Students at UCLA. Photograph: Richard T Nowitz/Corbis

 

In the “student mix” category, four Australian cities – Melbourne, Sydney, Brisbane and Adelaide – are in the top 10, based on their high undergraduate populations and levels of tolerance and social inclusion for their share of the 272,000 international students enrolled in higher education in the country.

Read full article here – http://www.theguardian.com/world/2016/mar/08/the-worlds-best-cities-for-millennials

Rent in London is nearly three times more than in Berlin and Madrid

Looking for a sure-fire way to ruin your day? Take a quick look at rent prices in literally anywhere else in the UK except London. Yeah, not great, is it? But it’s not just the rest of the UK that has it better than us on the rent front. Flatshare website Weroom has looked at the average cost of a room in a flatshare in London, Paris, Madrid and Berlin – and there are no prizes for guessing which city is the most expensive. London came out top (obviously) at £950 per month, while Paris was about 30 percent less at £651, and Madrid (£351) and Berlin (£341) were nearly two-thirds cheaper than London.

And there are plenty more depressing stats where those came from. Houseshares in London have an average size of 88 square metres across three rooms – a similar size of two bedrooms in Berlin (86 square metres) and Paris (82 square metres), which means Londoners are paying more money for less space. Great.

Source – http://www.timeout.com/london/blog/rent-in-london-is-nearly-three-times-more-than-in-berlin-and-madrid-022516

What Is This Mysterious Bedroom Doing In Berlin’s Subway Tunnels?

Employees of Berlin’s public transport company BVG got a creepy surprise last week, when they discovered a fully-furnished bedroom in an unused section of U-Bahn tunnel. The bedroom was tidy and well looked-after, but the BVG claims that it wasn’t lived in.

These photos, sent anonymously to the Berliner Zeitung news site, may be part of an art project, a political statement, or a prank. The room, on the Berlin Metro’s line 9, is furnished with an Ikea bed, a potted plant (recently-watered), an easy chair, and even a TV, wallpaper, and art. The room, says Berliner Zeitung’s Antje Kara, seems to have a 1980s office vibe to it, although it’s more of a Communist-era East German 1980s vibe than the garish, neon-colored 1980s us Westerners experienced.

Employees of Berlin’s public transport company BVG got a creepy surprise last week, when they discovered a fully-furnished bedroom in an unused section of U-Bahn tunnel. The bedroom was tidy and well looked-after, but the BVG claims that it wasn’t lived in.

These photos, sent anonymously to the Berliner Zeitung news site, may be part of an art project, a political statement, or a prank. The room, on the Berlin Metro’s line 9, is furnished with an Ikea bed, a potted plant (recently-watered), an easy chair, and even a TV, wallpaper, and art. The room, says Berliner Zeitung’s Antje Kara, seems to have a 1980s office vibe to it, although it’s more of a Communist-era East German 1980s vibe than the garish, neon-colored 1980s us Westerners experienced.

The buzz around the prank is focusing on who did it, and how, complete with complaints that Berlin’s metro security has failed. The who may remain a mystery, but the how is easy. Taking your Ikea flatpack furniture home on public transport is totally normal in Berlin. Nobody would pay you any attention. And looking at the photos, it seems that the bedroom is in a part of the underground system away from the actual train tunnels, meaning nobody had to jump off a platform and disappear into a tunnel with a heavy CRT TV set.

By secret underground construction standards, this bedroom is small fry. In the summer of 2004, police in Paris discovered a clandestine cinema hidden in the city’s extensive catacombs while running a training exercise. The 3,000-square-foot subterranean complex was “strung with lights, wired for phones, [and] live with pirated electricity.”

The underground bedroom is still pretty creepy, though. Unless you’re one of Berlin’s homeless, trying to survive the Northern European winter. Then it might seem pretty appealing.

Source – http://www.fastcoexist.com/3056801/what-is-this-mysterious-bedroom-doing-in-berlins-subway-tunnels