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Germany Cited As Most Attractive Country For Real-estate Investment Recognition

Posted by Staff Reporter on Mar 18, 2016 08:59 AM EDT
European Central Bank And Frankfurt Financial District more big
In this aerial view photographed from a mulitirotor drone with local authority permission the new headquarters of the European Central Bank (ECB) stands in the foreground next to the Main River as the financial district and skyline of central Frankfurt stand behind on June 13, 2015 in Frankfurt, Germany. The ECB and other major global financial creditors are currently grappling with the growing possibility of a Greek state bankruptcy and a departure of Greece from the Eurozone. (Photo : Getty Images/Sean Gallup)

Germany has been recognized as Europe's most appealing country for real estate investment. According to a survey of global real-estate investors from property-broker CBRE, Germany ended the two-year British reign over the recognition. This has been viewed as the latest clue that the U.K. real estate market is starting to fall. 

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About 17 percent of investors chose Germany as the top country for investing in the region. Around 15 percent voted for the U.K., which garnered 31 percent last year. The shift is the result of weaker economic growth in the U.K., Britain's upcoming vote in the European Union and consecutive years of booming property values.

Germany won the top place in part because investors have started looking more widely across the region. The rise in attention towards central and Eastern Europe had been increasing. According to a report from Nasdaq, investors always search for new yield may be part of the explanation.

London still remains as the most attractive city for real-estate investment. However, this year only 15 percent of investors put the U.K. capital on top of their lists, which is half from 2015. Last week, Deutsche Bank AG warned that central London was at risk of a price correction.

According to a report from The Wallstreet Journal, The drop in sentiment has been the result years of soaring demand for U.K. property, which has led the global real-estate boom. The region has been seen as a safe-haven from financial issues, while returns remain attractive compared with other assets.

London rose to the top of wish lists during the boom as economic recovery began. For investors from the Mideast and Asia, central London was a first port of call. In 2015, U.K. real-estate investment volumes reached $93.11 billion, according to Real Capital Analytics. London accounted for about half of that figure.

Germany now takes the lead as the pace of investments has turned sluggish in the second half of last year, dropping 18 percent from the same time in 2014. 

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