foreign money dominates almost 75% of the transactions in the commercial real estate

http://immobilienblasen.blogspot.com/2007/...te-2006-or.html

and please tell me if we (the germans) are as bad as in the "homer simpson" clip... :-)

http://immobilienblasen.blogspot.com/

Germans have been so doom and gloom about their own country they are not investing. This is what happens when you come out of the bottom of a long term of decline. Foreign investors where the first to see opportunities in the beginning of the 90s. I do agree that there is some overspil from the global property boom but German property still makes sound investment compared to a lot of other countries.

hello,

i agree 100%.

lots of sales from geman retailers, funds etc were "fire sales"

but the latest activity is often flipping from one private equity investor to another.

valuations have changed quickly.

relatively speaking it maybe looks good but....looks to me like a rolling bubble

http://immobilienblasen.blogspot.com/

I invested in commercial property directly in 2005 and more recently in British funds specialising in German commercial real estate.

The reason is straigtforward - supply is very constrained. Once the economy improves such assets become very highly valued commodities.

Us Brits have witness this happen accross the UK, so armed with this expericence we look for the next market wave.
When things are gloomy the majority think this will never end, but obviously the gloom does end, and the owners of the assets that benefit are then well placed to benefit from the inevitable ripple.

Bearish types think they can time the market but this is foolish. By the time they realise they need to own assets, the easy money will have gone.

Ive seen it written that German property prices have been largely flat for the last 10 years.

Does anyone have a graph to illustrate this?

Also have prices been flat in nominal or real terms?

Thanks

Through my work, I was involved in a study of German residential property late last year. If it helps, here are a few snippets from a colleague:

60% of people in Germany rent property rather than buy. In Berlin, 85% of people rent.
It is common for tenants to stay in a property for 10-20 years.
Generally, the only way to remove a tenant is if they have not paid rent or maintained the property.
It is the tenant’s responsibility to maintain the property.
Tenants will also redecorate and even refurbish a property.

Residential property in Germany is valued differently to the UK.
First the rental income and occupancy rate is determined.
Rental income rises are controlled by the government and tend to rise only with inflation (or improvements to properties).
The Value of a property is closely linked to the actual rental income.

As a result of this method of valuation, German property has not risen in line with most other countries around the world and is not subject to the boom and bust cycles in the same way.

On the positive side
The prices and rents on property have been flat for 15 years while most other EU countries have experienced huge increases
The affordability of housing is historically low
Building of new housing is below requirements
Numbers of households is increasing
Private equity has spotted this in the last 2 years and has started to move in.

On the negative side
The German population is expected to fall over the next 30 years
The German economy hasn’t been great although business confidence in Germany is at a 15 year high.
Although analysts believe that values will rise, they are not sure whether this will be in 2 years or 20 years.

here is part 2

http://immobilienblasen.blogspot.com/2007/...te-2006-or.html