For what purpose and where should you invest? To support native country you definitely need to choose it. To build your own oriental fairy tale, turn to UAE. And for less dramatic, but still changes, neighboring Poland will be enough. But is this really where the profitable options end? Together with you, we will go on a short trip around Europe, after which you will be able to judge for yourself what purchases are worth adding to your investment portfolio.
Pedantry and stability of the German real estate market
If metropolitan life in party Berlin stresses you out with its scope, but the desire to remain in the center of events does not go away, you can move from the first largest city to the second - everything ingenious is simple. Hamburg is in no way inferior to the capital, and in some respects even surpasses it. It is considered one of the largest port cities in Europe, so the long embankments and snow-white yachts moored on them are somewhat reminiscent of the resort coast of Italy, if you do not go into architectural and weather differences. I wonder how much rent costs in this city? The most popular segments in it are considered to be 1- and 3-room apartments, so we will focus on them:
- 1-room apartment in the center – €980;
- 1-room apartment in other areas – €740;
- 3-room apartment in the center – €1,870;
- 3-room apartment in other areas – €1,300.
If you rent it yourself, it may seem a little expensive, but if you rent it to someone, it’s a completely different matter. You can buy your home in Hamburg at the following price:
- 1-room apartment in the center – 8,140 €/m²;
- 1-room apartment in other areas – 1,380 €/m².
How profitable it is to invest in a purchase with subsequent rental can be judged by the level of rental yield, which is 2.7%. To make a big deal less of a pain, there is a 20-year mortgage with an interest rate of 3.95%. Previously, we conducted research of the Ukrainian market and calculated how many years it would take to buy an apartment in a particular area. In Hamburg, the average salary (after taxes) is €3,016 - if you wish, you can arm yourself with a calculator and independently calculate how much locals have to save for the optimal number of square meters.
We don’t argue that not everyone can afford Hamburg, but there are more affordable alternatives. Thus, the Saxon capital offers greater diversity in terms of housing and culture. Here you will find a real journey back in time - ancient palaces, cathedrals, theaters and prices that were in Hamburg only in the last century. The conditions in Dresden are much better suited for your first experience of living in Germany. You can rent an apartment to explore the country for just:
- 1-room apartment in the center – €730;
- 1-room apartment in other areas – €460;
- 3-room apartment in the center – €1,340;
- 3-room apartment in other areas – €1,000.
If the town wins your heart, even in its center you will be able to buy an apartment cheaper than on the outskirts of Hamburg:
- 1-room apartment in the center – 1,200 €/m²;
- 1-room apartment in other areas – 1,000 €/m².
Of course, not only prices differ, but also average earnings. It is only €2,700. The 20-year mortgage rate is only a few hundredths higher – 3.98%. But the yield is pleasantly pleasing - 3.8%.
The situation on the French market (don’t rush to believe everything in the picture)
The share of foreign investors has already jumped thanks to market situation. The Americans showed the greatest interest. They like the central areas of Paris and the Cathedral of Our Lady, Notre Dame de Paris, which almost burned to the ground. It was only through their efforts that they managed to keep prices in these parts of the city at their previous levels, and in some places even increase them. We invite you to take a short excursion into history to better understand general trends:
- over the past 5 years, the country’s market has grown by 27.8%;
- in 2023, sales fell by 12.6% in just a few months (from January to May), and prices by 1%;
- by the 4th quarter of 2023, banks had completely suspended issuing loans not only to foreign investors, but even to their relatives.
Experts agree, that you need to strike while the iron is hot. The price decline will continue by another 1-2%, after which growth may follow. Therefore, you need to seize the moment and keep your finger on the pulse of the real estate market. Due to temporary difficulties with mortgages, the number of applicants for a particular apartment will decrease significantly, so those with a large amount of cash will be able to safely choose any property they like.
It is predicted that by the end of May a new record will be set since 2018 - a drop in prices by 8% and a return to the long-forgotten 9,410 €/m². But this situation is not in all areas of the capital:
- in 6-8 districts prices decreased by 2-5%;
- in 12, 13, 19, 20 districts prices decreased by 8-12%.
The richer and more prestigious the area, the more stable the situation. The general trends did not affect luxury housing, prices for which stubbornly remain in the range of 28,000-45,000 € /m². It is the interest of foreign investors that prevents the market from collapsing completely. If in 2021 there were 47 nationalities among foreign investors, then in 2023 their number increased to a record 62. Among them, the majority are:
- Americans – 25%;
- Lebanese – 12%;
- Italians – 9%.
We are not hinting at anything, but with your contribution you can increase the share of Ukrainian presence.