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Europe > Germany

Opportunities of Investment in Real Estate Portfolio of social housing in Germany are far more lucrative with high yields and Metaron global fund is seeking to invest in this sector. The following below shows the rationale behind the investments.

Industry Overview

Most Germans live in rented accommodation. The proportion of renters to total households, at 55% in 2004, is among the highest in the world. Private landlords own about 46% of the housing stock, social housing is around 6%, and co-operative rentals are around 6%. Owner-occupation has been falling slightly from 43% in 2002, to 42% in 2006, due to potential capital losses from purchasing,

Germany, being Europe's economic powerhouse, is currently playing a crucial role in the sovereign debt crisis in Europe. House prices in Germany have risen, though economic growth is easing:
  • - The overall house price index for apartments rose by 4.3% during the year to August 2011 (1.85pc in real terms), its highest increase since 2006.
  • - The average price of new detached houses was up by 2.8% to &euros;238,484 (0.39pc in real terms) from a year earlier.

Another indicator, the hedonic price index rose 2.0% y-o-y to August 2011 (-0.42% in real terms) according to Hypoport AG.


Yet so far this year, German house prices have been unaffected by the economic slowdown. Has housing demand been boosted by Germany's strong recovery from the 2009 recession, by its 3.6% GDP growth in 2010. A boost from the strongest economic growth since reunification can't be ruled out.

Perhaps the long period of over-supply is coming to en and. Rental yields are rising in Germany's prosperous western cities. Huge new demand is forecast. Yet completions are flat. Financing for new building has not caught up.

Germany's market is turning, two other things seem likely:

  • - The west will continue to do better than the east
  • - New family homes will do better than old apartments

Rental yields are rising


The good news is that rent increases have outpaced real estate prices since 2000. Rents for existing contracts rose 12.8pc between 2000 and 2010, while rents for new contracts rose 13.5pc. Over the same period, house prices rose less. The average price of owner-occupied houses rose 10.9pc., while the average price of terraced houses fell by 3.2pc.