·
Euro currency weakness makes Berlin
property attractive
·
Booming economy, growing population
adds to appeal
·
Favourable demand picture spurs
Middle East investor interest
DUBAI, 10 November, 2015 – Berlin is attracting
interest from Middle East real estate investors looking to take advantage of a
booming economy, strong population growth, and a comparatively weak euro,
according to the latest quarterly Global Real Estate Outlook published by property
investment firm IP Global.
The
euro has lost about 12% in value against the US dollar over the past year on
the likelihood that additional central bank measures will be needed to
stimulate the Eurozone economy as well as the prospect of higher interest rates
in the US. Most currencies in the Middle East are pegged to the US dollar. A
weaker euro makes it cheaper to buy assets in the Eurozone.
Currency
fluctuations aside, IP Global says the fundamentals of Berlin’s property market
are the main factor driving increased demand.
Berlin
is forecast to need 19,655 new apartments every year until 2020. In 2014, less
than 9,000 were completed. This imbalance is driving price rises, says IP
Global. Average apartment prices in Berlin
rose 11.7% in 2014. In prime areas of the city like Mitte, the equivalent
figure was an even higher 24.2%.
With
increasing numbers of people moving to Berlin and the city’s economy continuing
to expand, Berlin is fast becoming a key market for property investors. High
profile infrastructure projects like the EUR5.3 billion Brandenburg Airport,
situated to the south of the current Schoenefeld facility, is proving a boon
for employment.
Another
significant project that is helping fuel demand for jobs is Berlin TXL at the
site of Tegel Airport. Tegel was the main airport for West Berlin, but will
close once Berlin Brandenburg opens in 2018/2019. Berlin TXL - billed as the
Urban Tech Republic – will deliver a modern research and industrial park just a
short distance from the heart of the city.
Richard Bradstock, Director at IP
Global in Abu Dhabi, said:
“Take a close look at Berlin’s economic fundamentals and it is easy to see the
city’s appeal for real estate investors. Not only is there a significant
shortage in housing stock, but its economy continues to strengthen as well. Job
opportunities are on the rise as big infrastructure projects are carried out.
This all means the city’s population will continue to grow and the demand for
housing along with it.
Berlin
has always had a reputation as a cool city and is regarded as a thriving
European centre for fashion, art, and culture. It is little surprise that Monocle
Magazine ranked the city number 3 in its 2015 Quality of Life Survey. We expect
Berlin’s appeal with property investors to only grow as well.”
