Chinese investors and German real estate
Everyone is talking about no credit check loans: dont get ripped off signature loans. Especially now, when the market is already tense, Chinese investors are increasingly investing. The Association of German Pfandbrief Banks has published a study. This illustrates how real estate in Germany is increasingly being bought by foreign investors. A total of 59 billion euros flowed into German real estate in 2017. That was three times that of 2010. Why do foreign investors, above all Chinese investors, buy real estate in Germany so much?
The popularity of German real estate for Chinese investors
The reason that Chinese investors regard real estate in Germany as particularly attractive and invest here is actually quite simple: The strong German economy enjoys an excellent international reputation. In Germany, the political situation is stable and legally secure. Foreign buyers, therefore, value the situation so that they can rely on German tenants in the best possible way. In addition, another aspect plays a very important role: Mortgage lending in Germany is particularly lucrative in the current period of low-interest rates. And one more thing is especially crucial for Chinese investors buying real estate in Germany: The real estate prices on the ground, in Beijing or Shanghai, are extremely expensive. There the square meter price ever comes to 10,000 € to 18,000 €. By comparison: in Munich, the average price per square meter in February 2018 is € 1,423 – a huge difference. In addition, in the two aforementioned cities in China, a real estate purchase is only possible for self-use. As a result, Chinese investors are looking for alternative real estate markets.
What impact does the investment have?
Foreign investors who invest in real estate here in Germany, first bring one to Germany: capital. This boosts the German economy and ensures growth. Another major topic alongside investment in real estate is the investment of Chinese investors in German companies. Whether companies from the pharmaceutical industry, mechanical engineering or the automotive industry – in the last 11 years, Chinese investors have acquired 196 local companies. This, too, has its advantages, because: cutting-edge technology is important to foreign investors. At the same time, they do not shy away from buying businesses that are not doing very well economically and investing in them. In this way, jobs in Germany can not only be secured but expanded if necessary.
The Frankfurt real estate prices are booming **
Is this always going on?
The economy in China is booming. But the question is how long will it stay that way? In order to take no risk here, the Chinese prefer to spend their money abroad. Therefore, the Chinese city has imposed a restriction on its citizens: a maximum of $ 50,000 per year may be exchanged into foreign currencies. Still, this does not detract from the Chinese investment appetite. Particularly popular are investment properties in Germany’s major cities. For example Berlin, Munich or Hamburg. Brokers are happy to accept these purchase requests and are now adapting individually to the interests of Chinese investors. And: Not only Chinese investors buy German real estate. These are also popular with American and Australian buyers. In this respect, Germany seems to remain a popular real estate investment target for foreign investors for the time being.