Local real estate attracts Germans as an investment option
After quarantine restrictions were imposed almost all over the world, more and more Germans decided to turn their attention to properties inside the country. It turned out that local real estate can be a profitable investment option.
Institute YouGov, which is engaged in market research, conducted a survey among the citizens of Germany. It was attended by 2 thousand people, and it was found that 57% of them believe investing in the country’s real estate market as a great option to get additional income. Last year the figure was 56% and at the beginning of 2020, before the pandemic and lockdown, the figure was 51%.
As for other investment instruments, 41% prefer to invest in stocks, 38% in gold and 16% of respondents are interested in deposit insurance policies
At the same time among the surveyed Germans 51% consider real estate primarily as a reliable way to invest and multiply funds. 22% when deciding on the investment of funds are focused on large profits.
Among respondents who earn a monthly income of one thousand to 1.5 thousand euros, 42% believe that the purchase of real estate is an excellent investment. Among those who earn 3 – 3.5 thousand EUR, this figure makes up 66%, and among those who have more than 10 thousand EUR per month, 83% prefer this kind of investments.
The share of respondents who invest indirectly in real estate is 49%. This can be participation in open-end funds, shares in investment and other. Thus, people are trying to make a profit, but to insure themselves against debts, as in the case of the purchase of housing mortgages.
It should be noted that Germany is the leader among the countries of the European Union at the rate of rising property prices. In the country, the price increase has been steadily continuing since 2016, but experts predict that the increase in value will soon be suspended.
While the purchase price of housing is steadily going up, rental rates are going down. Since 2020, apartment and home rents have risen 1.6 percent, with the pre-pandemic dynamic at 5 percent. Rental rates in the big cities are rising faster than in other parts of the country, although not as intensely as in previous years. In Berlin, on the contrary, the rent sagged by 3%, now renting a square meter here is 10 euros. In Frankfurt there is a 3% increase of rates, up to 15 euros per square meter. Rent rates in Bonn and Munich increased most of all – by 5%. At the same time in smaller cities the rates have decreased.