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德國房地產成環球紅火投資Ugly No Barrier for Apartment Sales in German Boom: Mortgages

 By Dalia Fahmy - Aug 29, 2012 4:43 PM GMT+0800

http://www.bloomberg.com/news/2012-08-28/ugly-no-barrier-for-apartment-sales-in-german-boom-mortgages.html 

With small windows, low ceilings and drab facades, the concrete apartment blocks favored by East Germany’s communist regime are known as Plattenbauten for their prefabricated panel construction. Now they are hot properties, caught up in a German real estate boom driven by foreign investors seeking a safe place to put their money.

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Residential apartments on Pfotenhauerstrasse in Dresden, Germany. Buyers of large residential portfolios should have plenty of choice as investors including private-equity firms sell almost 100,000 apartments this year to repay debt taken on before the market peaked in 2008. Source: Gagfah SA via Bloomberg

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Companies that have bought or bid for German homes this year include New York-based Cerberus Capital Management, Whitehall Street Real Estate LP, London-based Benson Elliott Capital Management and pension funds from Switzerland and Sweden. Photographer: Johannes Simon/Getty Images

A sale of 38,000 Dresden apartments owned by Fortress Investment Group LLC (FIG), many in the socialist-era estates, may be Germany’s next big residential deal after firms including New York-based Blackstone Group LP (BX) and Cerberus Capital Management LP made purchases that included Plattenbauten this year.
“German apartments are getting ripped out of people’s hands,” said Andre Adami, residential investment analyst at Berlin-based research firm BulwienGesa AG. “For every portfolio on sale there’s plenty of demand.”
Foreign investment in Germany’s housing market surged this year as private-equity firms, insurance companies and pension funds seek better returns than bonds while avoiding countries roiled by Europe’s debt crisis.
Buyers from abroad make up about half the purchases of German residential properties totaling more than 10 units. They spent 3.3 billion euros ($4.2 billion) in the first half, the most since 2008 and more than the 2.4 billion euros invested during all of last year, according to data compiled by broker Jones Lang LaSalle Inc. (JLL)

‘Attractive Assets’

“German residential is one of the more attractive asset classes in Europe,” said Roger Orf, Europe head of real estate at Apollo Global Management LLC (APO), the New York-based private- equity firm that owns 15 percent of Deutsche Annington Immobilien AG, Germany’s largest residential landlord.
Buyers of large residential holdings should have plenty of choice as investors including private-equity firms sell almost 100,000 apartments this year to repay debt taken on before the market peaked in 2008. Loans for the deals were typically packaged and sold as commercial mortgage-backed securities. About 8.8 billion euros of German multifamily CMBS is set to mature by the end of 2014, according to data compiled by Bloomberg, putting pressure on owners to sell or refinance their real estate holdings.
Blackstone in March agreed to buy about 8,000 apartments, many of them in eastern German prefabricated apartment blocks, from insolvent investor Level One. In May, Cerberus agreed to buy 22,000 homes from Speymill Deutsche Immobilien Co., another insolvent company, through a 985 million-euro debt restructuring. The properties, mostly located in western Germany, also included some Plattenbauten.

TLG Sale

Other foreign investors that have bought or bid for German apartment portfolios this year include Goldman Sachs Group Inc. (GS)’s Whitehall Street Real Estate LP, London-based Benson Elliot Capital Management LLP and European pension funds.
The government’s sale of its TLG Immobilien GmbH real estate unit is attracting interest from investors including Blackstone and Morgan Stanley (MS), four people with knowledge of the matter said last month. TLG’s commercial and residential properties are valued at 1.86 billion euros, according to the sales prospectus.
“Plattenbauten are very efficient,” said Christian Schulz-Wulkow, a partner at Ernst & Young Real Estate GmbH in Berlin. “You can buy lots of product in one location and you end up with 1,000 apartments that are very similar and can be managed in the same way.”

Underperforming Properties

Gagfah SA (GFJ), a company controlled by Fortress, purchased the Dresden apartments from the city’s government in 2006, near the peak of the market, for about 1.7 billion euros. Like other foreign companies that bought at the height of the transaction boom, New York-based Fortress was left with assets that failed to deliver the rental income and sales proceeds to justify the high prices.
Gagfah now plans to sell the homes for at least their book value of 1.8 billion euros to help pay down 3.1 billion euros of debt due next year, the company said Aug. 13.
The property boom is boosting the shares of Germany’s publicly traded real estate companies. Mutual-fund managers such as Vanguard Group Inc. and Edinburgh-based Scottish Widows Investment Partnership have added to their German residential holdings, helping drive up prices of the five largest companies by market value by an average of 55 percent this year. In that time, Germany’s DAX Index (DAX) has gained about 19 percent, while the U.K.’s FTSE 100 Index (UKX) has risen 3.5 percent.

Favorable Outlook

“Which other sector has growth right now?” said Vicky Watson, an investment director at Scottish Widows, which owns German property stocks TAG Immobilien AG (TEG) and Deutsche Wohnen AG. (DWNI) “A year ago, people were talking about how cheap German stocks are, but now we’re talking about what companies can do about making acquisitions and reducing vacancies.”
German real estate is being lifted by a growing economy and a favorable outlook for the market, according to Paer Hakeman, head of Germany for Stockholm-based Akelius Fastigheter AB. The Swedish property investment firm owns about 1 billion euros of homes in the country and in July it bought 300 Berlin apartments.
German unemployment is at a two-decade low and the economy will probably expand by 1 percent this year, according to the country’s central bank, the Bundesbank. The European Commission estimates the euro-area economy will shrink by 0.3 percent.

Berlin, Munich

Real estate in Germany is cheaper than many other European countries. Apartments cost an average of about 2,000 euros a square meter in Berlin and 3,600 euros in Munich, Germany’s most expensive city, according to data compiled by Jones Lang. That compares with 7,000 euros per square meter in Paris and 9,500 euros per square meter in London.
Price gains have accelerated over the past three years. In Berlin and Munich, where the boom has been the strongest, values have gained 16.8 percent in the last 12 months, according to Berlin-based online broker ImmobilienScout.
More German individuals are also buying homes, adding to the competition for properties, as they shield savings from the European debt crisis, Hakeman said. It’s seen as an inflation hedge, with land and buildings predicted to retain their value even if the crisis causes the euro to depreciate against other currencies, he said.
Germany has one of the lowest homeownership rates in Europe at about 46 percent. That compares with 84 percent in Spain, according to data compiled by the Munich-based Ifo Institute and about 65.5 percent of Americans that own their homes.

Alternative Investments

The German market has become more attractive at a time when investors are facing low investment returns as U.S. and European central banks keep interest rates at record lows. Rental income from a typical apartment building in central Berlin yields about 6 percent a year at current prices, BulwienGesa’s Adami said. Investors earn 1.35 percent with a German 10-year government bond.
Demand for apartments in large urban areas is soaring as Germans move out of the countryside to cities where they can find jobs more easily.
“German residential pans out because, while the population is shrinking, the number of households in urban areas is growing,” said Leonard Geiger, director of European research at Cohen & Steers (CNS) Inc., which owns about 5 percent of Deutsche Wohnen. “There’s limited downside,” he said.
The number of households grew 5.8 percent in Frankfurt and 6.4 percent in Cologne in the past decade as more people chose to live alone. New apartment construction hasn’t kept up with the growth because high building costs reduce the profit generated by rents, Adami said.

Housing Shortage

This is creating a shortage of housing in cities that are popular with buyers, said Niels Nielsen, chief executive officer of Danish investment firm Core Property Management, which has funds with about 1 billion euros in Germany.
“Our model has been to buy in cities where you see a long- term housing deficit,” such as Frankfurt, Hamburg and Cologne, he said. These places build about half the number of apartments they need each year, he said. “It’s just a question of supply and demand: the deficit results in an increase in rental levels.”
Rents are already shooting up in Germany’s largest cities, rising 8.3 percent in Berlin in the past 12 months and 6.4 percent in Hamburg, according to ImmobilienScout.

Foreign Backlash

Rising foreign investment has rekindled a backlash that began during the investment boom that preceded the global financial crisis. In 2005, some Germans began describing private-equity investors as “Heuschrecken,” or locusts, accusing them of buying homes to cut maintenance costs and raise rents with no regard for tenants.
Dresden’s government won a 36 million-euro settlement from Gagfah in March after accusing the company of violating tenants’ rights. In the southern German state of Bavaria, where state- owned bank BayernLB is selling homes valued at 2 billion euros, local politicians including Nuremberg Mayor Ulrich Maly have said they plan to raise funds to compete with bids from financial investors.
The spike in investor interest has raised concern that the flood of foreign capital may lead to more volatility, Piet Eichholtz, professor of real estate finance at Maastricht University, said at a conference in June.
That was the case in 2009, when German real estate transactions crashed following the collapse of Lehman Brothers Holdings Inc. Foreign investment that year dropped to 600 million euros after reaching a high of 10 billion euros in 2005, according to data compiled by Jones Lang LaSalle. The EPRA/NAREIT German stock index, which reflects trades by foreign and domestic investors, plunged from a peak of 1,470 in February 2007 to 237 in November 2008.

Debt Repayments

Some foreign companies that bought during the boom took large loans that they are now struggling to pay off. German CMBS are among the worst performing in Europe, according to Fitch Ratings. About 47.2 percent of German CMBS loans are fully performing, compared with a European average of 62.5 percent.
Recent price gains might also be the beginning of a bubble, said Steffen Sebastian, head of the Real Estate Institute at the University of Regensburg.
“Investment in the German home market right now has a strongly speculative character to it, and that’s what makes it risky,” he said. Cheap financing, fear of inflation and a dearth of investment options elsewhere are driving home prices to “ludicrous” levels in some parts of the country, Sebastian said.
“Especially foreign investors see Germany as a safe haven, but it’s not like the German real estate market is separate from the rest of Europe,” he said.

To contact the reporter on this story: Dalia Fahmy in Berlin at dfahmy1@bloomberg.net

德大都市房价疯涨 专家：房地产市场非泡沫

大纪元2012年08月16日讯】（大纪元记者吉一斗德国报导）通常人们认为，房地产是对抗经济不稳定的稳定手段，此时市场需求会增加。而在德国大都市 里，房价上涨相当可观。根据德国经济研究所（IW）最近公布的报告，德国公寓和住宅价格上涨迅速。仅仅去年一年，柏林、汉堡、慕尼黑的房价就上涨了8%到 9%。与2003年相比，八年来甚至平均上涨了10.5％

那么，德国房地产市场存在泡沫危机吗？这家研究所的专家认为，德国不存在这个泡沫危机。
目前创记录的低利率使许多储户对金融投资失去了吸引力，同时，贷款比任何时候都实惠，许多德国人因此看好房地产。德国经济研究所在报告中说，尤其是在大都市地区，公寓和建筑物都呈现大幅上涨趋势。汉堡的房价，八年间爬升了31％；柏林甚至多达39％。
房价最贵的是慕尼黑，那里一套公寓房每平米售价平均 4200欧元。其它几个大城市的房价为：汉堡3100欧元；法兰克福2900欧元；柏林2200欧元；科隆也有2100欧元。
尽管房价在明显上涨，但德国经济研究所认为：德国房地产市场是健康的。在德国没有理由出现象美国、爱尔兰和西班牙一样的房价泡沫。研究人员认为，德国高房价反映了强劲的市场需求，而且表现了大都市的吸引力。
报 告认为，因为泡沫价格的前提是，投资者相信房产能永久性增值。在这种情况下，投资者押注在高价转手，从而炒热了需求，最终产生了房价泡沫。如果投机者发现 期望过于乐观，会出现抛售风潮——泡沫破裂，价格下跌。这家研究所从四个方面分析了德国的房地产实况，并得出结论，德国房价非泡沫现象。
首先，德国房价上升，房租也在保持上涨。而所谓泡沫的迹象是，房价增长速度快过房租。但现在，德国房租也在保持跟进，例外的情况只发生在慕尼黑和汉堡。这两地的房价增长速度分别超出租金增长速度的21％和9％。
其次人们口袋里的钱更多了。在IW研究所调查的五个大城市中，就业人数比例都优于全国平均水平。从2006年3月至2011年9月，德国就业人数上升了11.7％。而慕尼黑上升了12.2％，汉堡16.6％，柏林16.1％。更多的就业率意味着更多的收入。
第三，住房供不应求。在经济繁荣时期，如果房地产兴旺的唯一原因是因为人们认为房价会进一步上涨，就面临着投机泡沫，接着许多物业出售，甚至是多次倒手。但事实上，德国公寓和住宅的需求大大高于供给，只有柏林例外，自2007年以来，房屋数量增加了60％。
最后一点是，银行信贷发行几乎没有增加。在投机的情况下，银行信贷发行量通常明显增加。尽管目前银行历史性的低利率，但购房信贷的数量只略有增加。德国人不喜欢借债，即使在贷款买房时，也会控制自有存款与银行贷款比例，甚至增加自有存款，以便早日还清贷款。
另外，专家通过对比国际性城市，认为德国属于房地产市场的“梦想国”。以单身一人一室住房花费在收入中所占比例为例，罗马是49%，纽约43%，伦敦 40%，巴黎35%，而德国最贵城市慕尼黑也只有28%，柏林21%，汉堡只是18%。
（责任编辑：贾南）

TEXT-Fitch:No signs of real-estate bubble in Germany

 Tue Aug 21, 2012 6:37am EDT    reuters.com
  http://www.reuters.com/article/2012/08/21/idUSWLA213620120821

(The following statement was released by the rating agency)

Aug 21 - Fitch Ratings does not consider there to be an asset bubble across Germany for either residential or commercial real estate assets. Property prices and rents have generally moved in line with economic fundamentals. Only in metropolitan areas, particularly Berlin and Munich, have price increases been seen to exceed fundamentals such as the relative economic stability of Germany, net migration and low construction activity.
However, Fitch is also cautious given that developments in other countries had been labelled as non-hazardous until evidence proved otherwise.
Fitch believes residential property prices will increase further across Germany and particularly sharply in core property markets in the short- to medium-term, as the agency expects investor demand to remain strong. This will inflate German banks' collateral values in the long run if the gap between economic indicators and price levels increases.
"In Germany's core locations, residential property net rental yields (net cold rent after operating expenses/purchase price) of up to 400 basis points per year are still achievable, although Fitch sees great variances between different locations," says Markus Schmitt, Associate Director in Fitch's Financial Institutions group. "However, Fitch expects net rental yields to fall further due to strong investor demand and a more moderate economic outlook, potentially constraining rental growth."
There has been moderate mortgage lending growth, with outstanding residential mortgage loans increasing by only 1% p.a. since 2003. This is despite Germany having one of the lowest home ownership ratios in Europe (about 46%).
Fitch believes that underwriting criteria for residential mortgage lenders are generally adequate. However it also notes that high loan-to-value financings which are only moderately priced are available from some German banks. Additionally, commercial real estate lending standards have improved since the onset of the financial crisis and credit risks are priced adequately.
For more information, see "No Signs of Real Estate Bubble in Germany", dated 15 August 2012 at www.fitchratings.com.
Link to Fitch Ratings' Report: No Signs of Real-Estate Bubble in Germany
here

歐洲樓市調查：德國房價十年平穩 西班牙失控泡沫破裂

 2012年08月14日 08:53:38
來源： 中國證券報

此次歐洲採訪，中國證券報記 者看到了幾個截然不同的房地產市場：德國過去十年房價平穩，市場預計未來房價小幅上漲；法國房價房租堅挺，廉租房建設給青年人和低收入家庭提供了保障；西 班牙和希臘有些類似，房地產泡沫破裂，房價在大幅跳水後，未來仍將調整。這種種的不同，一方面由于各國的經濟形勢不同，另一方面也由于各國房地產市場制度 和風險控制不同，其中有些經驗和教訓值得同樣面臨高房價困擾的中國借鑒。
    稅收抑制投機買房
    在歐洲幾國採訪時，中國證券報記者了解到當地政府對個人用于自住購買的首套房，都會給予稅收優惠。對投機性購房，則通過稅收來抑制。
    德國憲法規定，保障居民住房是聯邦政府首要的政策目標之一。這是德國所有房地產政策的核心出發點。德國政府鼓勵自住型購房需求，鼓勵房主長期持有房地產。
    不少德國人告訴中國證券報記者，對于個人購房自住，超過十年後再將房產進行交易可以免稅。如果在十年內交易，所得盈利一半以上會用于交稅， 這使投機炒房收益大幅減少，大多數有意進入德國房地產的資金，都出于長遠考慮。一個在德國工作的朋友告訴中國證券報記者，德國很多制度一旦實施後，不會輕 易修改。德國也出現過房價泡沫，上世紀90年代兩德統一後，德國的房價出現了大幅上漲。德國的房地產商興建了很多房子，但由于供大于求，社會進入老齡化。 1999年開始德國房地產市場持續疲軟，並一直持續到2009年。
    在希臘，中國證券報記者也了解到，在希臘買第一套房子，面積在100平方米以內是可以免稅的；超過的部分或買多套住房，則要收13%左右的稅。
    德國租房制度完善
    德國租房市場有比較完善的制度。一是突出對房主財產安全的保障。德國相關政策規定，租戶要保證房屋內部完整，不得破壞房屋內設施，否則將予 以賠償。為此，一些租戶為了防范由于意外造成的房屋內設備損失，還特意買了相關的財產保險。一是使得承租者對房租有比較明確的預期。德國規定房主在下一次 提價時，租金漲幅不得超過通貨膨脹水平。德國房地產中介公司安家置業總經理張琳在接受中國證券報記者採訪時表示，如果房東在下一年的租約中將租金漲得過 高，租房人可以拒絕支付房費，並到法院去控告房主。另外，房東若要解除租房合同，承租人可提出異議。房東非經過訴訟途徑，不得強迫房客搬出。
    這讓德國人對于未來的租金心裏有數，不急于買房。數據顯示，德國超過50%的家庭是租房居住的，這一比例在年輕人中更高。德意志銀行經濟學 家黑克‧皮特斯告訴中國證券報記者，目前德國人買房的比例大約是45%。之所以這樣，一個重要原因是德國人工作的流動性很大。在租房市場上，德國政府對承 租人也有比較好的保護，這讓德國年輕人敢于不買房。
    法國大力推廣廉租房
    對于法國房地產市場，中國證券報記者感觸最深的是，法國大力推動社會保障性住房的建設和供給，廉租房租金通常只有市場價格的1/3，最低為1/6，租戶主要為中低收入階層。一個在巴黎留學的中國留學生說，很多法國同學家裏沒有買房，而是幾十年都租住在廉租房。
    法國房價在2008年金融危機後，總體調整幅度比較小。法國房地產中介公司柏高樂總經理史帝芬以巴黎為例介紹說，金融危機後，2008年巴 黎房價大約跌了10％，此後重拾升勢，在2011年漲了10％以上，房價已經再創新高，租金水平也水漲船高。與此同時，以廉租房為代表的保障性住房成為法 國社會的“穩定器”。法國2000年立法規定，在人口超過5萬的城鎮中，廉租房佔全部住房的比例不能低于20%。此後政府出臺多項政策，鼓勵加大福利性住 房供給。
    法國政府是廉租房的主要投資方，地方機構以不同額度參與投資。中央政府會以財政預算撥款、減免土地稅和減免增值稅等方式直接進行資助。還有 專門的社會住房信貸機構承擔住房建設的信貸和投資管理。政府還允許企業參與投資，為其雇員興建廉租房。另外一些慈善機構吸收社會捐資款項用于福利性住房的 建設。
    在距離巴黎地鐵大概30分鐘的小城克裏奇，當地朋友告訴中國證券報記者，這裏的廉租房建設很好，供應充分。由于距離巴黎不遠，一些巴黎人來這裏申請廉租房。
    實用小戶型受追捧
    “巴黎的房租是很高的。”法國人史帝芬介紹說，在好的地段，一套200平方米的房子每月租金高達4000－6000歐元。這對大多數年輕人和低收入人士而言是很難負擔的。不過，在巴黎，15平方米左右的小戶型房子，每月租金在600歐元左右，很受年輕人的追捧。
    史帝芬給記者畫了一個示意圖，介紹巴黎市內那些看似古老建築的格局。一幢五層樓的建築，一層是底商，二到四層是100-200平方米的大公 寓，五層則是好多間15－25平方米左右的小戶型。據說，如果市面上有一套這樣的小戶型出租，往往能吸引三四十個租戶，一天就能租出去。
    更有趣的是，還可以逐步買下這些小戶型，然後打通後成為一個大房子。史帝芬介紹說，他現在自己全家住的一套150平方米的大房子，就是在過 去幾十年裏，“一間一間”買下來的。他清楚記得，30年前剛剛20歲出頭時，他買下了一個15平方米的小戶型。此後的幾十年裏，他又陸續買下了同層的幾套 小戶型，最後打通後成了一套大房子，現在和3個孩子共住，其樂融融。
    西班牙信貸失控吹大“泡沫”
    西班牙目前的房地產市場可以用蕭條來形容。據西班牙國家統計局的最新數據，今年一季度，西班牙房價指數加速下滑，同比下滑12.6%，超過 去年三季度和四季度7.4%、11.2%的跌幅。目前房地產市場成交低迷，中國證券報記者採訪的各方人士認為，西班牙房地產市場還要進一步“擠泡沫”。西 班牙目前房地產市場的“苦果”與上個世紀末開始的銀行貸款風險失控有著密切關係。
    西班牙房地產市場異常繁榮，房地產價格在1997年-2007年的十年裏出現了大幅上漲。西班牙許多地方儲蓄銀行的控股股東多是各個地方政府。而地方政府為了刺激本地經濟，鼓勵其控制的儲蓄銀行盡可能多地發放購房貸款。
    由于西班牙各銀行間互相競爭，給買房人貸款優惠。買房人甚至可以從銀行獲得高達房款100%甚至120%的貸款額。在房價上漲帶來的賺錢效應驅動下，大批西班牙人加入購房大軍,2007年擁有自有住房的西班牙人數量已經達到總人口的80%。
    另外，銀行對房地產商的貸款也失去風險控制，在房價上漲的時期，銀行給房地產公司大量的資金支持。在2008年金融危機爆發後，西班牙房地 產市場出現下挫，許多銀行沒有想方設法收回貸款，反而認為房價的調整只是一時的，繼續給房地產企業融資。後來許多房地產企業倒閉，給銀行帶來了很多壞賬。
    仲量聯行巴塞羅那資本市場部總監夏維爾‧艾斯托拉齊在向中國證券報記者介紹了當地的情況後，聽說中國的房價在過去幾年也出現了大幅的上漲。 他最關心的是目前中國購房的貸款比例。當聽說目前在中國買房個人首付必須在三成以上時，夏維爾表示，風險不大。（記者 黃繼匯）

Affluent Buyers Seek a Piece of Berlin's Past

By NIELS C. SORRELLS

Published: August 16, 2012 

 

http://www.nytimes.com/2012/08/17/greathomesanddestinations/17iht-reberlin17.html 

BERLIN — There are lots of apartments in Berlin. But the demand, at least among affluent prospective buyers, is for those built before World War II, with their high ceilings and almost floor-to-ceiling windows. And their supply is limited for the simple reason that so few survived the war.

For news and features on real estate, follow @nytrealestate.

Research from Winters & Hirsch Property Consultants in Berlin found that 27.2 percent of the city’s apartment buildings were constructed before 1918. “The old character plays a role, naturally,” said Philipp C. Tabert, the company’s managing director. “It has a lot more charm than a new building.”

But that charm comes at a price. Older apartments sell for an average of €155,000, or about $191,000, according to the company’s 2011 sales data. That is €1,810 per square meter, or about $207 per square foot.

In comparison, apartments built from 1970 to 1990 average €1,490 per square meter; those built from 1949 to 1969 average €1,255 per square meter, according to Winters & Hirsch.

Experts say that in addition to the higher cost, a historic apartment is likely to be more expensive to maintain.

Many fall under ensembleschutz, or ensemble protection laws, a program in which the city and residents of a neighborhood with historic character agree to try to retain that ambience. In those areas, for example, apartment owners would need permission to change their windows, to ensure that a building’s historic facade is maintained.

Historical preservation laws known as denkmalschutz place even more rigorous restrictions on almost any change. But Ulf Sieberg, an expert on energy efficiency and building renovation with the German environmental organization NABU, said only about 3 percent of all buildings in Berlin were subject to those laws.

Steffen Riedel of Eza!, an environmental and energy conservation consulting firm in southern Germany, said potential buyers of historic properties should press sellers for details of any preservation restrictions and check with the local authorities about specific requirements.

“It can be frustrating and expensive” to maintain the charms that made an apartment desirable in the first place, Mr. Riedel said.

He also said that many older buildings had poor air circulation, which over time could lead to problems with mold, and that they might lack insulation.

Mr. Sieberg said potential buyers should be aware that German law calls for the country to become climate neutral — producing no pollution or greenhouse gases — by 2050, a goal that will require many buildings to become more energy efficient. Because the date is so far in the future, the enforcement of building codes and environmental standards now is perceived as lax, and many owners have not brought their units up to even current building codes.

His organization is working with the government on the standards, with a focus on establishing the true cost of energy efficiency renovations — for example, determining who would pay for scaffolding that would be needed for a building overhaul.

One idea to ensure compliance is to change rental laws so that owners are required to bring apartments up to code. He acknowledged that such action would produce higher rents, but if energy efficiency is seen as important, Mr. Sieberg said, “then you have to be prepared to pay the consequences.”

It is important to set such guidelines, he said, partly because some owners will never invest enough in rental properties where they do not live themselves. Also, many buyers are foreigners who plan to use their vintage apartments as income-producing vacation rentals and do not want to pay for retrofitting or do not know the laws.

Darrell Smith, whose company Buy Berlin focuses on helping foreigners find properties in the city, said it had become more difficult to find high-quality historic apartments over the past year because demand had skyrocketed. “Basically, the demand is being driven by more people wanting vacants because they want to take advantage of touristy areas,” he said, noting a move away from the tradition of buying occupied apartments and continuing to collect rent from the existing tenants.

Marc Dennis, of Manchester, England, who bought an apartment of 33.5 square meters, or about 360 square feet, in the Friedrichshain neighborhood through Buy Berlin, fits that profile. He plans to use his apartment, in a building dating from 1910, when he is in town and to rent it the rest of the time, primarily to tourists.

Such rentals are legal, though the Berlin legislature is considering banning the practice.

Mr. Dennis said he expected to start renting out the apartment fairly soon. He said that though the cost of buying an apartment in Berlin had been rising — he would not specify how much he paid, saying it was between €70,000 and €100,000 — the city continued to be affordable compared with other European capitals.

As for keeping the apartment up to code, he said he would rely on the property managers referred by Buy Berlin to let him know about any changes that might be needed.

The management services come at a cost, he said, but, “to be fair, the amounts I’m going to be paying are extraordinarily reasonable in terms of what will be covered,” including assistance in finding repair services and legal help with renters.

The Friedrichshain neighborhood, Mr. Dennis said, is a “place where young professionals are looking to let in or rent in. It just seemed to tick all the boxes.”

The Next Safe Haven in Europe: German Real Estate

 http://www.cnbc.com/id/48656785

Published: Tuesday, 14 Aug 2012 | 5:43 AM ET

By: Antonia van de Velde
CNBC.com Deputy News Editor
Despite yielding extremely low or even negative returns, German Bunds have not lost their safe haven appeal, underscoring the huge appetite among investors for low risk assets as the euro zone debt crisis drags on. But a new asset class is on the rise – and many believe it has a lot more to offer.

Ruth Eastham &Amp; Max Paoli / Getty Images/Lonely Planet Image Reichsstrasse houses in historic center.

Investors are flocking to the German real estate market, lured by steadily rising house prices, low mortgage rates and a stable macroeconomic outlook.

"'Safe haven' is on everyone’s lips. And if investors ask themselves in which regions and with which investment vehicles it is still possible to invest, they will not be able to avoid property,” Dr.Frank Pörschke, CEO of real estate services group Jones Lang LaSalle Germany said in the group’s latest German property market report.

Figures released on Tuesday showed the German economy grew modestly in the second quarter, just beating forecasts and staying ahead of other euro zone countries facing stagnation or a contraction in growth.

Helge Scheunemann, head of research at Jones Lang LaSalle Germany told CNBC.com that insurance groups, pension funds and open-ended funds were the main buyers, and that investors were mainly German. They are interested primarily in existing properties, rather than new developments, in the western cities of Hamburg, Munich, Frankfurt and Duesseldorf.

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“The rise in prices we currently see is mainly due to the stable economic situation we have in Germany and a decreasing unemployment rate, as well as a lack of supply of good property,” Scheunemann said. “The higher demand is related to the overall economic situation. We have low interest rates and fewer alternatives for institutional investors.”

Nominal house prices in Germany declined by around 10 percent between 2000 and 2005 and then stagnated until 2009, before rising at 2 to 3 percent per year in the last couple of years, according to Deutsche Bank research.

Prices are higher in the country’s biggest cities, but a discrepancy between the east and west of the country persists as people flee eastern Germany, including Berlin, in search of jobs in the more prosperous West.

Scheunemann added that unlike many Americans or Brits, most Germans are happy to rent for longer and don’t dream of home ownership (related: Americans Rewrite the Dream) .

In addition, 100 percent home purchasing loans are not available and buyers need a deposit of as much as 30 percent. These factors could help to explain why prices have remained relatively low.

“It is not a boom. You can’t compare it with the U.S. the U.K. or Spain,” Scheunemann said.

The gains witnessed in Germany are in line with economic growth in the country, analysts say, and differ significantly from the double digit increases seen in Ireland and Spain (related: Europe's Modern-Day Ghost Towns) before the credit crisis.

“Despite the deep global recession in 2008/9, Germany has experienced average annual real economic growth of 2 percent since 2005 compared to less than 1 percent between 2000 and 2005. The economy and residential property prices developed quite similarly,” Deutsche Bank said in a recent report. “The recent increase in residential prices went hand in hand with a rise in disposable income, so the price-to-income ratio remained flat.”

The bank believes the flight to safe havens is likely to continue to support German house prices in the near future with prices are likely to rise fastest in cities with more than 500,000 inhabitants.

Scheunemann agreed that prices were in line with the economic fundamentals, and largely dismissed talk of a brewing bubble in German property.

“There is good demand and incomes are stable,” he said. “There is a danger (of a bubble) maybe in a few years,” he said, with some signs in certain locations, but the gains seen so far in prices were not a cause for serious concern.