German properties proving attractive

18-Mar-2005

Property investors in the UK are understood to be looking to Germany as a good area to buy property.

Despite recent predictions that the German residential property market is likely to continue in its present slump for at least two years, both commercial and private buyers see the country as a buying hotspot.

John Carrafiell, head of European real estate at Morgan Stanley said he believed German home ownership, the lowest in the EU at 43 per cent, is set to rise.

He predicted that German buyers would move away from the traditional family home later in life and would start investing in city apartments.

"Tenants are paying rent for more than 13 years, it's not a high return but it's incredibly stable and in this low interest rate environment we think investors will find that attractive," the property expert added.

Berlin currently has just 11 per cent owner occupiers, while the Saaland region near the French border, has 58 per cent home ownership, according to figures from the Royal Institute of Chartered Surveyors (RICS).

Germany is currently enjoying low eurozone interest rates of two per cent and has seen no real rise in house prices in 15 years, meaning mortgage payments are at or below rent levels.

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