Investors cashing in on the German property boom

The position in Germany is not dissimilar to the UK market in the 1990's, when investors started buying up low-priced properties in order to refurbish and sell on or benefit from the rental market. The UK market as a result has flourished for many years and property investors made considerable profits by buying at the right time. Indications are that the time is now right for Germany.

The country has one of the lowest home ownership levels in Europe; statistics show that nearly 50% of the population do not own their own property. Limited financial packages have been one of the main hurdles in rectifying this situation, with many Germans having to put down as much as 40% in order to achieve a mortgage and have proof of sustained savings over a number of years.

This, coupled with what has been a bad decade for the German economy, has led to a new period of investment as many shrewd investors see that the German property market is now about to rise at an unprecedented rate as better financial packages are unveiled in order to kick-start the property market.

An influx of foreign investors has led many to believe that Germany could be the strongest emerging market to date. Many private equity funds have invested billions into the German property market. This is a strong indication that the market is going to rise significantly over the next few years. These huge investments by private equity funds have also influenced individual investors who are jumping on the bandwagon at a tremendous rate due to the prospect of high rewards.

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