Germany: investors prefer real estate than stock market

The German Real Estate market is in a boom phase. The reason, according to a study by Postbank, must be sought in the fact that investors are taking away the savings from the stock and bond market to invest in real estate.

Although most Germans seems to prefer the rent to the purchase of the house, the sector of real estate has become an increasingly attractive option. This not only because the cost of rent has suffered significant tweaks to the upside, but also for the obvious benefits that come from a battered economy that continues pushing the monetary policy banks to keep interest rates at historic lows.

The confirmation that the German market is going through a period of strong growth came a few weeks ago, and the data of building permits in the first half, which showed an increase up to 182,800 apartments. A value that has not been seen in Germany since 2000 for the production real estate, according to the first semester of 2016.

According to the Federal Statistical Office, this is an increase of 30.4% on an annual basis. The largest increase is in the category of pensioners and public housing (+ 174.2%) which also includes the reception facilities for the refugees; then follow the condominiums (+ 30.7%), the two-family homes (+ 18.3%) and single-family (+ 12%).

Interest rates at historic lows and the need to accommodate hundreds of thousands of refugees appear among the reasons for this growth industry. But Germany needs, however, between 350 thousand and 400 thousand new homes a year.