100Billion Euros gives German Property Investors Hope

The German Government is about to unveil a multi-billion Euro fund to assist businesses that can't obtain finance from the banking system, Chancellor Angela Merkel has revealed.

The package -- worth some 100 billion Euros (135 billion dollars) -- is aimed at helping to tide healthy firms over until normal levels of bank lending can be resumed, she said in an interview with Bild am Sonntag to appear Sunday, adding: "We do not need 100 billion Euros of new money because this is about guarantees."

Liam Bailey, chief market analyst for overseas property portal Property Abroad gave his views on the plan:

"Germany has been one of the most robust economies in Europe, but it is beginning to fall victim to the financial crisis; recently recording its first unemployment hike since 2006. Less people own their own home in Germany than any other EU country, so people investing in German property do so because of the solid residential rental market. The down-side to this is that the government is forced to impose and maintain strict controls over the raising of rent in Germany.

"When the German economy was extremely strong, was hoped these controls may be eased. If unemployment was to continue rising these controls could become more severe. Therefore overseas property investors looking at Germany will be hoping the new fund, staves off unemployment before it has a chance to become a problem, and helps Germany make it through the credit-crunch without taking any drastic measures to further restrict rent rises."

Property Abroad have some solid investment properties in Germany, including a tenanted apartment in Spandau, Berlin offering a 6% rental yield. The apartment has been rented out to the same person for ten years, thus the person has a reliable income. A 6% yield is very good for Berlin, though it is likely because the price of the apartment has been dropped for a quick sale. The good thing is: rents in Berlin are so common and so regimented that even if the tenant was to become unable to pay the rent, or was to move out for any other reason, the new tenant would be found quickly without dropping the rental rates.

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Bulgarian Property Value Increases

Those who invest in property in Bulgaria could be set to see a high rate of capital appreciation. According to recent figures from the National Statistical Institute, the cost of residential property increased by three per cent in the third quarter of 2008, the Sofia Echo reports.

Dobrich was one location that demonstrated a significant rate of growth, with an increase of nine per cent on the previous quarter. Plovdiv fared even better with values shooting up by 11 per cent within three months, demonstrating that metropolitan areas of the country could be particularly good for investors. Those who have already purchased a property in the area, or are doing so at the moment may find that their second home is worth considerably more than it was originally purchased for.

On average the eastern European country saw an increase of three per cent in the third quarter of 2008. According to Bridging Finance, investors are increasingly looking to purchase holiday homes and investment properties in Bulgaria, reports the Manchester Evening News.

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Thailand 'is a winter hotspot'

Owners of tourist lodgings in Thailand could be set to receive a high volume of British visitors this winter.

According to the Times, many people from the UK are looking at spending the winter months in a hot and sunny location overseas.

Thailand was flagged up as one ideal destination for this group, as it offers excellent weather conditions at this time of year.

In addition, it was also said to be highly affordable, particularly during the fortnight before Christmas.

"After a dismal summer we're all craving some winter sun," the Times commented.

This suggests that investors who own rental accommodation in hotspots such as Phuket could be set to benefit from higher occupancy rates.

The publication added that people who venture overseas at the right time could stand to save "significant" amounts of money.

Earlier this month, the Times highlighted Thailand as a very popular location among second home buyers from the UK.

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Property in Germany

History has not been in favour of German property investment, as the fallout of reunification was sluggish for the property market for a long period of time. However, the German property market is back with a vengeance and is gathering momentum on a daily basis! It took the Soccer World Cup of 2006 to revive the fortunes of the laidback property scenario within Germany.

Germany a late entrant in the real estate business is destined for higher plateaux. Though the country is considered as much more technologically advanced than most of its European counterparts, it is the housing segment that requires cosmetic work to bring it back to the forefront of the world's property stage.
Salient Features of Germany from Investment Point-of-View

Any prospective German real estate investor must ponder over the following features of the country before making up his mind –

* The reunification of Germany in 1990 was a welcome global development. But the country had to pay a huge price in terms of a buckling economy. The positive vibes about German property is a recent development. Historically, the country was a war-ravaged nation that hardly attracted offshore investments. But modern Germany has not only survived, but also emerged as a strong and vibrant European economic powerhouse.
* Since German property demand is of recent origin, the experts have already predicted big things for German real estate, and the time for investing here is now, as the prices are on an upswing of late.
* Most Germans have traditionally preferred rental accommodation than owning a house of their own (which is just 43% of the German population). This spells a great investment opportunity for overseas investors who wish to earn handsome rental income from a decent property in one of the happening cities of Germany, like the capital city of Berlin.
* The country is not too high on the tourism map of Europe. However, this doesn’t mean that Germany has any dearth of tourist spots. The rich history of this country holds an obvious edge over some of the other countries in Europe. It’s just that successive governments were too busy to promote tourism in the wake of economy revival. But the potential for this sector is immense and the country is widely believed to welcome millions of visitors annually in the coming years.
* Germany’s technology potential is widely respected all around the world and it is a powerhouse in the electronic goods segment. This has lent added weight for the German economy to prosper. An improving economy also means a consistent drop in the unemployment rates within the country. The nation’s industry is also giving full support to bolster the sagging fortunes of the country’s economy. Germany has emerged as the world’s largest exporter by volume, with nearly a billion dollars in exports in 2006, and with a trade surplus of over $200 billion in the same year.
* The capital city of Berlin has emerged as the best place to invest in Germany. With money giving ample fuel to the economic health of the country, the capital city is the obvious choice for real estate investors from around the globe. The government has awakened to the importance of foreign investment in the country. Resultantly, there has been a surge in property rates in Berlin. As an indicator to the British investors, apartments in Berlin start from £35K, and depending on the size, location, and other considerations, the price may go up to as far as £200K.

Legal Position of foreigners owning property in Germany

The German government has not imposed harsher limits on the foreign ownership of real estate in the country. Non-Germans can also buy, own and sell an unrestricted quantity of land and homes. They can also hold property as landlords, and even develop property after satisfying certain simple rules and regulations. Buyers from EU countries have an added advantage of access to residency and labour rights as set out in EU law. The Non-EU investors must consult the local embassy regarding their rights in Germany.

A legal professional is required to carry out all the paper work in Germany for the real estate investors. This is because most of the administrative work requires to be executed in German, and despite your best knowledge of the language, you’ll be ill at ease while handling German authorities.

The German Banks are also offering low interest rates on mortgages. Most banks will lend up to 70 per cent of the purchase price, though you will have to fulfill certain conditions. The maximum mortgage terms are 30 years on a rate of fixed interest. See our page on getting a mortgage in Germany

Any property purchase in Germany is susceptible to Property Tax as per different rules of the different regions. However, the rates are not too prohibitive. Even the rental income is chargeable under Income Tax. It’s better that you hire a local solicitor to guide you through the possible taxes regarding your property in Germany. Better still why not check out our guide to buying property in Germany.

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