Baino Estates LLC exploring Germany's housing landscape
In 2021, Germany saw a big shift in its real estate market. For the first time since 2013, more money went into residential properties than commercial ones, with a whopping €65 billion invested in homes compared to €59.3 billion in commercial spaces.
Looking just at the climbing house prices misses the bigger picture. Experts at Baino Estates LLC point out that certain trends in society, like more people needing homes, will keep going even with a pandemic around. They say that by 2030, we’ll see about a 3% increase in households, especially in big cities.
By 2040, we could be looking at an extra two million households in Germany, hitting 19.3 million. And a lot of these are going to be single-person homes, which already make up 42% of the market. So, investors should keep an eye on this when they’re thinking about where to put their money.
Germany’s always been short on houses, and even though it’s gotten a bit better, there’s still a need for over 600,000 new places to live. Things like high building costs and lots of rules are making it hard to fix this. But the way things are going, property values should keep going up, and rents for existing places will likely rise a bit too.
For big-time investors, it’s worth noting that rent prices for houses are really stable, even more so than office rents. Rent prices have doubled since 1990, and even big crises, like the recent pandemic, haven’t really shaken this trend.
House rents in Germany have been pretty steady for the last 20 years, and it looks like that’s not going to change because of how society is evolving. This means if you’re investing for the long haul, you can count on a steady flow of rent money. Plus, with interest rates staying low, putting money into building homes still makes sense, even though it can be pricey to get started.
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