Dear cash-rich globetrotting denizens of the world, Japanese fund managers, Greek oligarchs, New York trust-fund creatives, Italian businesspeople, Swabian dentists – you all seem to have too much money for your own good, but nowhere to park it safely. The bank will give you zero interest. The euro might collapse. America is flirting with meltdown. What about Germany?
You keep hearing that Berlin’s cheap, Berlin’s hip, Berlin’s for sale, Berlin’s safe – Berlin’s the “place to be”. But you know what? Maybe it’s not. Maybe there’s a bubble that’s growing, says the Bundesbank, not exactly an institution known for spreading unsubstantiated rumours.
The thing is this: a lot of you buyers just seem to be throwing cash at Berlin apartments and buildings without really being informed about our city. Here are a few facts to keep in mind:
- The state of Berlin is a financial basket case, with about €61,000,000,000 in debt.
- We can’t build an airport on time – or within budget (cost projections just went up by €700 million to €5 billion – with the new airport manager even afraid to name a date when he can safely announce when the airport will definitely open).
- We love wasting money – like the €600 million and counting we’re throwing at a fake Prussian palace, in the heart of the Museum Island.
- We have the highest unemployment rate (11.2 percent) in all of Germany! Which is cool, because here you can go on the dole and hang out in the park all day without being labelled a loser; It’s not cool though, if you’re a landlord and you want your tenants to pay the rent.
- Chances are you want to actually make money with your property purchase and not just keep it dormant. Returns on investment aren’t rising as quickly as prices. Those great Berlin deals just aren’t as great as they were just a few years ago.
In layman’s terms: We’re a mess, people! Just because we’re the capital of Europe’s most successful large country, doesn’t mean we have an endless supply of high-earning over-achievers just dying to live in (and able to pay for) your high-end investment properties.
Continue at your own risk… don’t say you weren’t warned.