All eyes on East Germany as property interest grows

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The capital of Germany has attracted a lot of attention recently, which has influenced the rise in property interest in neighbouring states of Berlin.

Berlin has experienced an increase in real estate activity, which is said to have spread throughout neighbouring states, including Saxony, Saxony Anhalt, and Thuringia.

Ingo Arlt of Berlin-based estate agent GMBH, said: “Cities with a growing nucleus of ‘sunrise industries’, in innovative sectors such as new technologies and renewable energy, are going from strength to strength.”

“These medium-sized urban hubs not only have vibrant cultures and rapidly growing labour markets; property prices also remain a good 30-40 per cent below western German equivalents, with rent levels steadily gaining ground attracting yield-focused investors.”

FERI, a leading European research and forecasting group recently conducted a survey that showed Germany’s economical potential is strong.

The report shows that Berlin is growing in popularity, but eastern locations such as Jena and Potsdam are now rising far above West German cities such as Frankfurt, Hamburg and Cologne.

Marco Haebold of agency City Makler Dresden, said: “Cities like Dresden and Leipzig have potential for a range of investors.”

“With finance rates around four to five per cent, net yields of seven per cent or higher ensure a positive cash flow, plus there’s a stable tenanted rental structure.”

Transaction costs remain strong when compared to those in the UK.

Transfer Money to Germany

Individuals considering an investment in German property should most certainly consider the logistics of transferring money abroad.

Potential buyers of German property have a number of financial options available to them and therefore it is necessary to carefully consider the options due to the range of rates on offer to UK buyers.

Therefore, investors intending to send money from UK (which is inevitable if you are looking to make a property investment) are encouraged to compare the market before the choice of German mortgage is finalised.

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All eyes on East Germany as property interest grows

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