An emerging trend in the German real estate market reveals that individuals are buying properties at increasingly later stages in life. Over the past 10 years, the average age of property buyers in Germany has risen in a variety of demographics, with first-time buyers and property developers both demonstrating this progression. In the former group, Germans are now, on average, two and half years older than they were a decade ago.
Since 2004 the average age of first-time buyers has risen from 37.4 to 39.9-years-old, meaning that many people are now turning 40 before entering the market. Some commentators have attributed this to the decrease in mortgage interest rates, suggesting that it has given individuals who had previously been renting an incentive to purchase their first home. It also seems that longer life expectancies mean that a greater proportion of people are now taking a more relaxed approach to purchasing property, choosing home ownership at a time which suits them. In a recent article for Die Welt, economics correspondent Karsten Seibel suggested that the trend is part of a broader group of lifestyle changes, with many people now also opting to get married and have children later.
However, the trend is not just evident amongst first-time buyers. Those who are funding investment property portfolios are also doing so later, possibly as a result of lower interest rates and the exceptional growth of the real estate market, which has seen house prices increase by as much as 10% in several cities. The upward trajectory of the market could also be encouraging potential developers. In the past decade, the average age of property developers has risen by almost four years from 37.6 to 41.5-years-old.
Urban areas such as Berlin are especially profitable for investors, as the value of property is soaring and the cost of renting is similarly on the ascent. Experts have claimed that the capital could ultimately become a more expensive place to rent in than Munich. In particular, the central area of Mitte is undergoing a considerable redevelopment, with new apartments welcoming a steady influx of German and international newcomers to Berlin. The historic city centre’s architectural rejuvenation has progressed over the last 10 years, with new exclusive penthouses such as those in the Yoo Berlin complex – some of the most expensive in Berlin – appealing to affluent investors.
Germany’s cultural shift towards private home ownership is a positive transition for any property investor, whether they are looking to buy a house to let or to live in. If you are interested in purchasing a property in this flourishing market, or already own a luxury home that you are looking to sell, Engel & Völkers is perfectly placed to help you. We have wide-reaching knowledge of local, exclusive real estate opportunities, with over 240 residential shops across the country.