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Property in Berlin still on the up

Friday, 18 April 2008 12:00 AM

Germany remains one of the "safest countries in the world to make a property investment", despite the on going credit crunch, argues David Stanley Redfern (DSR).

The crown jewel of the country's market is the capital Berlin, finds the overseas property investment specialist.

According to a major study into the Berlin housing market, carried out by the company in the first quarter of 2008, rental rates are growing in every district in the city.

Furthermore, the rate of growth is accelerating in six of the city's twelve districts, including: Charlottenburg-Wilmersdorf; Treptow-Köpenick; Mitte; Neukölln; Pankow and Steglitz-Zehlendorf.

"Germany's government is strict about rental rate rises in Berlin," explained Liam Bailey of DSR.

"It has to be, to avoid people being priced onto the streets because of the large portion of Berlin's population forced to live in rented accommodation, because they haven't been able to buy their own home.

"Berlin rental growth is so strong now because the economy is at one of its strongest points," he added.

The extremely large proportion of Berlin residents either forced or choosing to live in rented accommodation, some 82 per cent gives Berlin one of the strongest residential rental markets in the world, argues Mr Bailey.

However, government control means residential tenancies rarely achieve more than a, still respectable, five percent yield.

Yet, things could be about to change.

"The current unprecedented level of economic growth, and the fact it is largely fuelled by growth in the export sector, which should see Germany survive a rocky global economy better than most, has brought reports the government may soon be able to bring new legislation relaxing the strict laws governing rental rises," enthused Mr Bailey.

"For the first time there is hope of achieving higher yields in Berlin, which should really be the case from the solid all year round rental that is so easily achievable.

"But even without a government relaxation, the growth in Berlin rental rates without government help, the aforementioned stability of Germany's economy and the high likelihood of it best weathering the global economic storm, is turning Berlin into one of the world's most popular destinations for a property investment."

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