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German growth boom for property investors

Monday, 10 September 2007 12:00 AM

Strong growth in the German economy has led to predictions of a property investment boom in Europe's largest rental market.

The German economy witnessed growth of 2.7 per cent in 2006, the highest growth since 2000, unemployment is falling and the number of jobs is also increasing.

The government will also reform business taxes in 2008 to make the economy more attractive to international investors.

In addition to this, due to increases in the divorce rate and the number of elderly people living alone, the Federal Office for Regional Construction and Development has predicted the number of households will increase by some 910,000 by 2020.

All of these factors have made the country attractive to international property investors, according to PropertySecrets.net.

The German market is also focused on property rental.

"Its housing policies have favoured rental markets for many years and, as a direct result, the rental market is strong, stable and regulated," commented PropertySecrets.

"This means that most Germans prefer to rent, rather than own a house, and that is why the country has the lowest home ownership rates in Europe, this is positive news for property investors."

Renting a property is often cheaper in Germany than a mortgage and tenancy laws regulate rent and offer a high level of protection to tenants.

However, the German market is moving from a short-term phase to a value phase, according to PropertySecrets.

"That means the market is mature and established with strong rentals, but does not show significant capital growth, hence, not an ideal time to invest."

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