How Germany’s property market is profiting from the UK’s Brexit exodus
With so much focus on London over the last three years, it is worth noting that Germany has seven distinct economic hubs, including Munich, Hamburg and Frankfurt - the latter with a mere 3% real estate vacancy as Germans working in finance return home and international firms plant flags.
Indeed JP Morgan, Goldman Sachs and Morgan Stanley are all expected to ramp up their Frankfurt operations within months, with KPMG and McKinsey & Co., and some Japanese banks set to follow. Five new commercial buildings will scrape the city’s sky within five years, which means a lot of cash-rich, time-poor people searching for high-end digs and the city’s lowdown.
This, according to Greissl, gives Quintessentially a huge edge. “In Germany, most apartments don’t even hit the market; 40% are bought by their tenants. Because of our contacts, we can deliver what clients want, whether it is a bank needing to relocate staff and lease several apartments or a family seeking a home near the alps or lakes,” she says. “And because we have properties in the pipeline and a network of homeowners, we can move quickly”
Once a purchase is complete, various optional home management and lifestyle bolt-ons can help smooth the ongoing relocation even more, with Quintessentially handling everything from property maintenance to dry cleaning. This type of concierge service covers life outside of the home too. “Our clients tend to travel a lot,” says Greissl. “Someone who lives in Munich may want us to get Coldplay tickets, say, or access to gyms or spas, in another country.”
Quintessentially is looking to expand this package with new developments, offering a 12-month Elite membership at the signing of the purchase contract. “Buyers can use the services even before the project is completed,” she adds.
Of course, clients are increasingly viewing properties in key German cities as rental opportunities, with Quintessentially managing every aspect of the service. In the first half of 2018, while London was flatlining and New York slumped, residential property transactions throughout Germany surged by 19% to €8.8bn, compared to a year earlier, according to the global real estate company Savills.
Dr. Klein & Co, a Berlin-based property investment firm, says year-on-year apartment prices in the capital rose by 12.82% to a median price of €3,906 per square metre during the third quarter of 2018. In Hamburg, prices increased 11.34% year-on-year to €3,985 and one- and two-family houses rose by 6.55% to €2,640. Munich apartments were up 11.24% year-on-year to €6,361 per sq. m; one- and two-family houses rose by 10.08% to €4,771 per sq. m. And in Frankfurt, apartment prices rose by 6.71% to €3,317 per sq. m. during the second quarter of 2018; one- and two-family houses had a year-on-year price increase of 5.71% to €2,579 per sq. m.
“With purchase prices and rentals still comparatively low compared to other cities, we still see much potential for buying and renting throughout the seven big cities here,” says Griessl. “The important thing is that we offer our clients a service specific to their needs. “We have one client - who works for a tech firm in Berlin - who spends her life in various hotels. We run errands for her and make sure that there is food in her apartment whenever she is home”.
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